Overdraft Fees Frequently Asked Questions
What is an overdraft?
An overdraft occurs when you make a transaction for an amount higher than the balance in your checking account.
For example, if your account has a balance of $500 and a transaction takes place that's $600, you would be overdrafted $100 and your account would be negative.
What is an overdraft fee?
An overdraft fee is a charge from your financial institution when you make a transaction that causes you to overdraft.
Which transactions can overdraft my account?
Debit, check, or automatic payments can all overdraft your account.
What's the difference between an overdraft fee and a non-sufficient funds fee?
Overdraft Fee: a fee charged when you make a transaction that is more than your account's available balance, but the financial institution pays the transaction.
Non-Sufficient Funds Fee: a fee charged when you make a transaction that is more than your account's available balance, and the financial institution does not pay the transaction.
What options are there for managing overdraft fees?
No Fee Checking: Beacon's Budget Checking Account offers no overdraft fees or non-sufficient fund fees. To learn more about Beacon Budget Checking, click here (LINK).
Transfer from Savings: You can designate a backup savings account to automatically cover overdrafts from your checking account.
Overdraft Privilege Program: With all Beacon Checking accounts, except for the Budget Checking, you may be eligible to opt in to the Overdraft Privilege program. When your account overdrafts, the funds are paid, but there is an overdraft fee associated with each overdraft. The overdraft fee under this program is often less than a vendor would charge you for an overdrafted check or payment. For more information on the Overdraft Privilege Program, click here (LINK).
Member Plus Protection: A line of credit that deposits money into your checking account when you overdraft your account in increments of $100. Member Plus Protection is subject to credit approval. For more information on Member Plus Protection, click here (LINK).
How does an overdraft-free checking, like Beacon's Budget Checking, work?
You will never be charged for overdraft fees or non-sufficient fund fees with the Beacon Budget Checking. The way this works is when you make a transaction that is more than the balance in your checking account, the transaction will not be processed in most circumstances.
In a few situations, if you make a transaction that is authorized for one amount, and the payment withdrawn from your checking account from the vendor is a higher amount, your account could become negative if your balance is less than the total payment. For example, if you have $20.00 in your bank account and eat at a restaurant where you spend $19.00. If you leave a $5.00 tip, even if the total amount the cashier processes is covered, when it hits your account it will be for $24.00 and draw your account negative.
Even in this situation, you will not be charged an overdraft or non-sufficient funds fee, but no further transaction will be authorized until your account is positive.
Learn More about Beacon's Budget Checking (LINK).
