When you attempt to make a purchase by debit card or check and there is not enough money in your account to cover the transaction, an overdraft occurs on your account. To help eliminate merchant fees, alleviate embarrassing situations, and lend a hand when finances are tight, Dupaco offers Overdraft Privilege, which pays overdrafts on eligible member share draft accounts up to $700.
Overdraft Privilege is a service that's consistent with the credit union's philosophy and mission to meet members' financial needs and resolve short-term financial problems. It protects members from the embarrassment and cost of bouncing a check or multiple checks (most merchants charge a Non-Sufficient Funds (NSF) fee per check on top of the financial institution's NSF fee). Here is what you need to know about Dupaco's Overdraft Privilege service, how to elect coverage, alternatives, and ways to avoid overdrafting.
When your account lacks sufficient money to cover a cleared check or transaction, an overdraft occurs on your account. Dupaco will attempt to honor your check in two sequential ways:
- If your account is set up for an automatic savings transfer, Dupaco first will transfer funds from your savings or other designated account to cover the check or transaction cost. The first six automatic transfers per month are free, and subsequent transfers are subject to a fee. Setting up the automatic savings transfer can be initiated by contacting Dupaco.
- If you still have non-sufficient funds to cover the cost of the check or transaction, Dupaco's Overdraft Privilege will take your checking account balance below zero, assess the standard NSF charge, and honor the check or transaction amount. Due to changes in federal regulation effective August 15, 2010, Dupaco can pay overdrafts on ATM transactions and debit card transactions on your account only if you ask us to. Checks, ACH recurring payments, and other transactions that use share draft checking account number will be paid without the need for you to elect this coverage.
In the event you neither have enough money in savings for an automatic transfer nor are enrolled in Dupaco's Overdraft Privilege program, the credit union must return the check to the merchant or payee as "unpaid due to insufficient funds." This incurs a returned check fee from the credit union, along with additional $25-$50 in fees charged by many merchants each time a check is returned to them due to insufficient funds.
If an account is overdrawn, is there a fee charged each day the account is negative?
Dupaco's NSF fee schedule is not determined on a per-day basis. The NSF fee is per item, therefore if the account is overdrawn, a NSF fee is charged when a new check or transaction clears the account. Some banks charge a fee for every day an account is overdrawn. For Dupaco members, as long as no additional checks or transactions clear, a member's account may remain overdrawn for as long as 30 days with no additional fees or interest charged.
Does Dupaco control the order in which checks and debit transactions clear the account?
No. Dupaco posts checks and debit transactions in the order the credit union receives them. Therefore, maintaining an accurate record of outstanding checks written and debit transactions you have made on your checking account will give you the "real" balance of your account at any time.
What are the eligibility requirements for Overdraft Privilege?
An eligible account in good standing is defined as the following:
- The account has been open for at least thirty (30) days and has deposits totaling at least $300 or more within each thirty (30) day period
- The account demonstrates consistent deposit activity
- The account owner is current on all loan obligations
- The account is not overdrawn for more than 30 consecutive calendar days
- The account is free of any restrictive hold codes
Are new checking accounts eligible?
Not immediately. For new checking accounts there will be an aggregate deposit requirement of $300 during the initial 30-day period following the opening of the account. In addition, the member must meet the eligibility requirements listed above in order to qualify for Overdraft Privilege.
Is interest charged on Overdraft Privilege advances?
No. Because the amount of the overdraft advance is provided at no interest, Overdraft Privilege provides members with an excellent alternative to expensive payday loans.
How does Dupaco's overdraft protection fee compare to those charged by other financial institutions?
Overall, credit unions typically charge less for overdraft services than other financial institutions offering similar services. (The average overdraft fee at a credit union is considerably less than the average fee at the nation's big banks.)
Are there alternatives to Overdraft Privilege?
Yes. With a quick call or e-mail to Dupaco, you can request that an automatic transfer* be made from your savings account to your checking, should your checking account balance reach zero. And should the need arise, Dupaco representatives are also available to help members determine better ways to budget and manage their money.
*Funds will be transferred from savings to checking in the exact amount (to the available limit) to cover the overdraft. Automated overdraft fund transfers exceeding six per month will be subject to a fee.
Do I have to sign up for Overdraft Privilege?
Due to changes in federal regulation effective August 15, 2010, Dupaco can pay overdrafts on ATM transactions and debit card transactions on your account only if you ask us to. Checks, ACH recurring payments, and other transactions that use share draft checking account number will be paid without the need for you to elect this coverage.