Bouncing checks (writing checks for more money than is in your Bank account) can be a costly mistake. It is always better not to bounce checks in the first place, but if you occasionally have trouble tracking the balance in your account and have ever bounced a check, you may want to consider Overdraft Manager.
Overdraft Manager is not a free ticket to spend more money than is in your account, but it can help reduce the typically expensive fees associated with having insufficient funds, including having your checks returned in the event of an inadvertent overdraft of your account. There is no fee for having this “safety net” on your account, you are only charged for this service if you overdraw your account. We charge a fee of $27.50 if you have insufficient funds for a check, debit or Electronic Funds Transfer. It is called a Paid Overdraft or Return Item fee. The merchant or retailer to whom you wrote the check may also charge you a fee (typically $27.50 to $50 or more) for the bounced check, in addition to what you still owe them from the original purchase.
Here is how Overdraft Manager works for you. When you need more money than you have in your account, Overdraft Manager may allow you to withdraw funds or write a check for more money than what is in your account.
For example, suppose you do not have Overdraft Manager and your account balance is $50. If you write a check for $100, the Bank will charge your account a Return Item fee (currently $25) and will return the check. In most cases, the merchant or retailer that you wrote the check to will require you to redeem the check and will charge you a Return Check fee (in this example, $27.50). This means that you have now incurred fees of $50 ($27.50 at the Bank and $27.50 at the merchant or retailer) for a check that was not even paid.
Let’s assume, however, you had an Overdraft Manager limit of $400. When the check arrives at the Bank, our system would take into account your $50 ledger balance, as well as your $400 Overdraft Manager limit. This would make your total available balance $450. In this case, the check may be paid and your account would be charged a $27.50 Paid Overdraft fee. The total charge to you would have been $27.50 (compared to $50 if Overdraft Manager were not available). Additionally, you avoid negative reporting to any check approval networks or with the merchant.
When you use your Overdraft Manager, you must remember to subtract the overdraft fee from your account balance. In the example above, you would have subtracted $125 from your account: $100 (the amount of the check) plus $27.50 (the amount of the Paid Overdraft fee). Your new balance would be negative $75. Any additional items that come in while your account has a negative balance will also be charged the Paid Overdraft/Return Item fee of $27.50 per item. It is important to record these fees.
Overdraft Protection Plus
An overdraft does not necessarily mean you are short of money to cover the purchase. It could simply mean that the money you need is in your savings account, money market account, or additional checking accounts. You are able to transfer money from any one of the types of accounts listed above to offset an overdraft on your checking account. The key to using Overdraft Protection Plus is that you must sign up for it in advance.
Our Overdraft Protection Plus service offers a convenient way to automatically transfer funds from one American Heritage Bank deposit account to an American Heritage Bank checking account. The transfer only occurs when the checking account balance is not enough to cover transactions posting that day. Transfers are made from your “other” account in increments of $27.50. This could mean that more money is transferred than you might actually need to cover the overdraft. The Overdraft Protection Plus transfer fee is $5 per day when a transfer is made.
Here is how it works:
If you have $50 in your checking account and the check you wrote for your car payment of $310 came out of your account before you could make a deposit, $275 would be transferred from your “other” account to cover the negative balance. Remember to record the $5 fee charged for the Overdraft Protection Plus transfer.
Certain account types have restrictions on the number of withdrawals or transactions that can be made on a monthly basis. Please review your account materials to ensure that you do not incur additional fees due to the type of account used for the Overdraft Protection Plus transfer.
Benefits of Overdraft Manager
It is never a good idea to bounce a check. However, for those (hopefully rare) times when you make a mistake and become overdrawn, having Overdraft Manager can help:
- Reduce unanticipated fees associated with being overdrawn
- Eliminate the risk of “returned check” fees from merchants or retailers
- Ensure your checks are paid promptly
Points to Remember about Overdraft Manager
- Always practice responsible account management and only use your Overdraft Manager limit in the event of an inadvertent overdraft, emergencies, or unexpected situations.
- Every debit item, including checks written, ATM withdrawals, ACH debits, point of sale debit card transactions, or any other electronic transaction, on an overdrawn account will be charged a Paid Overdraft/Return Item fee of $27.50 and the fee will be deducted from the availability of your remaining Overdraft Manager limit. However, you must “opt-in” to access your Overdraft Manager limit with your everyday VISA Debit Card transactions and your ATM Card transactions.
- Your Overdraft Manager limit will not show as part of your available balance at an ATM but the machine will allow you to overdraw your account up to the available Overdraft Manager limit if you have “opted-in”.
- Any negative balance should be brought to a positive balance within 30 days of the first overdraft or Overdraft Manager may be removed from your account.
- The Bank will not pay your overdrawn items if it is determined that ‘excessive use’ or ‘abuse’ of this product has occurred. Items in excess of your Overdraft Manager limit may be returned unpaid.
- A signed authorization is required before Overdraft Manager is added to your account.
- Any item that causes an overdraft of $1 or less will not receive the Paid Overdraft/Return Item fee.
Tips to Avoid Overdraft and Insufficient Item Fees
- Ask us how to set up Overdraft Protection Plus.
- Ask us about training on responsible account management.
- Keep your check register up-to-date to track how much money is in your account.
- Record checks and other transactions when you make them.
- Pay special attention to record your ATM withdrawals and fees, VISA Debit Card purchases, and other online payments.
- Make sure you record all utility, insurance & loan automatic payments and account fees in a timely manner.
- Remember that some checks and automatic payments may not have cleared your account yet.
Review your monthly account statements. Between statements, use Online Banking, Mobile Banking or Telephone Banking to check your balance and view which payments have cleared.
Overdraft Protection Terms and Conditions
You agree to maintain an active checking account relationship with American Heritage Bank during the entire period that the overdraft authorization is in effect.
You should always clear your overdraft balance within 30 days of the first overdraft.
The Overdraft Manager authorization may be immediately terminated without notice by the Bank upon your failure to maintain an active checking account relationship with the Bank.
The Bank, while this authorization is in effect, may honor and pay overdraft checks and allow checking overdraft withdrawals from ATMs, point of sale (POS) machines, VISA Debit Check Card transactions, ACH debits, or other electronic transactions, which in the aggregate are within the Overdraft Manager limit. Generally, the Bank’s pay order will be: “Items for cash, such as ATM withdrawals or cashed checks, will pay first, then pre-authorized transactions, then checks, each from low to high,”
Each such overdraft, paid or returned, will be subject to the $27.50 fee, not to exceed ten overdraft fees per day, and will be included in the maximum Overdraft Manager limit. Any overdraft items above the maximum Overdraft Manager limit may be paid or returned at the Bank’s discretion and assessed a $27.50 charge for paid or returned items.
Upon honoring an overdraft check or an overdraft withdrawal, notice will be sent to you for each such transaction. Each such overdraft, including the overdraft fees, should be paid in full within thirty (30) days after the overdraft first occurs. American Heritage Bank reserves the right to set-off against other related accounts if the account is not paid in full within thirty (30) days from the date of overdraft.
You agree to abide by the Bank’s rules and regulations governing checking accounts (and all amendments thereto) as stated in the signature card “Deposit Account Agreement”.
Upon written notice to you, the Bank may amend this authorization in any respect, including the per item fee. Such notice shall be properly given when enclosed with your checking account statement, in a separate mailing or any other electronic means. If this authorization needs to be amended because of a change in State or Federal Regulations, the change shall be effective immediately without notice.
The Bank, or any one of the account holders, may cancel this authorization upon receipt of written notice to the appropriate party. Cancellation by the customer requires written notice to the Bank or verbal discussion. Cancellation by the customer does not terminate the right of American Heritage Bank to collect any outstanding amounts owed by customer as herein above set forth.