Overdraft Protection

Text Size:

Overdraft Protection (ODP)

Heritage Credit Union has several ways you can avoid fees that can be charged if you don't have enough money in your checking. Looking out for the best interest of our members is key so we don't want to encourage overdrafts as a habit - just want to save you money where we can! This is how it works, if you write a check, use your debit card or preauthorize a payment from your account and you don't have enough to cover it, HCU will pay it.

How does it save me money & my reputation?

Let's use a real example. If you wrote a check at a store and there wasn't enough money in your account to pay it, the check would be sent back to the store as "insufficient funds." The credit union would charge you a fee for processing the check and the merchant would charge you a fee for writing a bad check. If you had overdraft protection, the merchant would be paid and there would be one fee by your credit union to provide the overdraft service. Fees by the merchant can vary greatly but it is pretty common that your fees would double without some sort of overdraft protection.

If you used your debit card to make the purchase you wouldn't have a return check fee by the merchant because your card would tell the store clerk that it was declined. With ODP, it would send an approval message without the merchant knowing the account was negative.

You choose the best overdraft option:

1.Transfer from Savings
If there is not enough money in your checking account to clear the checks you've written, we can first check your savings account. If the money is available, we will transfer the funds needed to your checking account. This is a great option but it requires you to keep extra money in your savings for emergencies and it's not free. A transfer fee is charged each time.

2. Overdraft Protection Line of Credit
Overdraft line of credit is a loan that is linked to your checking. If you don't have money in checking and you have available credit on your ODP loan, we will automatically transfer the money to checking if the account is overdrawn. Members would need to complete a loan application and meet credit standards to qualify for this option. There is a fee associated with this service and you will have to pay interest on the loan until it is paid in full.

3. Member Privilege
Member Privilege is the name of our overdraft program that allows a member to withdraw more than the account balance, for a short period to cover unexpected emergencies. In essence we loan you the money by allowing your account balance to go negative. We wouldn't want our members to get in too far over their heads so each account is set up with a pre-approved limit. This program does have some coverage limits based upon the type of withdrawal you are making. A new federal regulation requires you to sign an Opt-in form to clear everyday debit and ATM transactions (See details below). A fee for coverage is charged each time you use it.

You're covered automatically with Member Privilege
Transactions that are automatically covered are:
- checks you wrote
- purchases made with your debit card that happen periodically like online subscriptions
- pre-authorized withdrawals from your checking where you gave your checking account information to set up, like the health club or utility payments.

Get complete coverage with Member Privilege
Other transactions can be covered by signing an Opt-In agreement. The agreement allows Heritage to pay the other times you may need money but are running a little short.
- ATM transactions
- debit card purchases at the merchant