If you have ever made a mistake by writing a check for more money than the available balance in your checking account, you are aware of the expenses and problems associated with inadvertent, non-sufficient funds items. We want to help you avoid these situations. You have options.
Option 1: Overdraft Protection*
Your Tremont Credit Union savings accounts can be designated to protect your checking account from an unintended funds error. By electing to have your savings cover your Checking Account’s insufficient funds, you prioritize the order in which your savings accounts would be accessed. For example, you may want your Regular Savings account to be accessed before your Christmas or Vacation Club accounts. While a savings transfer is convenient, there are limitations under Regulation D when used for overdraft protection or pre-authorized payments/debits as explained below.
Since Regulation D only places a limit on the savings account, we suggest setting up pre-authorized payments/debits from a checking account.
About Regulation D
Regulation D: The Federal Reserve Bank’s Regulation D limits the number of certain transactions you can make from your savings accounts each month. Each individual savings account is allowed a total of six (6) Reg D transactions per month. They may be in the form of overdraft protection from your savings account to pay a check or cover a pre-authorized debit on your checking account.
A pre-authorized payment/debit is often used to pay a third party item, such as utility bills, credit cards, mortgages, insurance premiums and car payments. Many times a member will set up a pre-authorized payment from their savings account only to find that the transaction will be returned because they reached their Regulation D limit for the month.
Option 2: Courtesy Pay
Courtesy Pay** is available to eligible checking accounts. Rather than automatically returning, unpaid, any non-sufficient funds checks or automatic debits that you may have, we will consider, without obligation on our part, payment of your reasonable overdrafts, as long as you maintain your account in good standing.
Courtesy Pay may cover your insufficient funds items, with a limit of up to $800 for personal checking accounts and $1,500 for business checking accounts. If Courtesy Pay is used, our normal non-sufficient funds fee of $32 will apply to each item that would create an overdraft on your account. We will send you a notice each time an overdraft occurs.
Some benefits include:
- You may avoid very expensive charges from merchants for returned checks
- You may avoid the embarrassment and inconvenience of dishonored checks
- Courtesy Pay is available for online banking bill payment transactions
There is no action on your part to sign up for Courtesy Pay, your account will have Courtesy Pay service as long as your account remains in good standing. Also, we may authorize ATM withdrawals and everyday debit card purchases which may overdraw your account if you have provided us with your consent to do so.
*If we have approved an overdraft protection program for your share draft/checking account, we may honor debit transactions when your account has insufficient available funds by transferring funds from another account, as you have directed, or as required under the Credit Union’s overdraft policy. Funds will be transferred to cover the amount of the overdraft and a $5 fee will be applied to the account, per the fee schedule. Funds transferred from your share accounts are subject to the transaction limitations described in your applicable consumer Truth-in-Savings Disclosure or Business Rate Schedule & Account Disclosures. If the overdraft exceeds the available balance of the share account, then the transaction will be declined, and a $32 fee may be applied. Contact the Credit Union to enroll in the overdraft protection program. (In accordance with federal regulations, share (savings) accounts are limited to six (6) preauthorized, automatic, telephone, or audio response transfers (including overdraft protection transfers) to another account for which the member is an account-holder.)
**The credit union’s Courtesy Pay plan is a discretionary non-contractual courtesy. It is not the obligation of the credit union and the credit union may refuse to provide the courtesy on any personal checking account at any time. The account holder does not have a contractual right to Courtesy Pay and courtesy payment is not guaranteed.
A Tremont Credit Union Regular Savings Account (membership share) is required to be open and maintained with a balance of at least $30.