Navigating Overdrafts: What You Need to Know
Financial institutions offer various services to help customers manage their accounts effectively. One such service involves handling situations where an account lacks sufficient funds to cover a transaction.This is known as an overdraft,
which occurs when a bank or credit union pays a transaction despite the account holder not having enough money to cover it.
Rhode Island Credit Union, like many financial institutions, provides options for covering overdrafts. These options include:
- standard Overdraft Practices: These are the default procedures that come with your account.
- Overdraft Protection Plans: These plans, such as linking to a savings account, may offer a more cost-effective option to standard overdraft practices.
This article focuses on explaining the standard overdraft practices at Rhode Island Credit Union.
Understanding Standard Overdraft Practices
Rhode Island Credit Union do authorize and pay overdrafts
for specific types of transactions, including:
- Checks and other transactions made using your checking account number.
- Automatic bill payments.
However, the credit union will not authorize and pay overdrafts
for the following types of transactions without your explicit consent:
- Automated Teller Machine (ATM) transactions.
- Everyday debit card transactions.
Did You Know?
Federal regulations require financial institutions to obtain your consent before charging you overdraft fees for ATM and everyday debit card transactions. this is frequently enough referred to as “opting in” to overdraft coverage.
It is crucial to note that we pay overdrafts at our discretion,
meaning the credit union do not guarantee
that it will always authorize and pay any type of transaction. If a transaction is not authorized and paid, it will be declined.
Overdraft Fees: What to Expect
When Rhode Island Credit Union pays an overdraft, the following fees apply under their standard overdraft practices:
- A fee of up to $35.00 will be charged each time an overdraft is paid.
- There is no limit per day on the total fees that can be charged for overdrawing your account.
Pro Tip
To avoid overdraft fees, consider setting up balance alerts thru online banking or mobile apps. These alerts can notify you when your account balance is low, giving you time to transfer funds or make other arrangements.
Opting In or Out of Overdraft Coverage
If you wish to have Rhode Island Credit Union authorize and pay overdrafts on ATM and everyday debit card transactions, you can download the necessary form and present it at a branch or mail it to: 160 Francis Street, Providence, RI 02903.
You can revoke your authorization at any time.Your revocation must include both your name and the last four digits of your account number for proper identification.
If you do not
want Rhode Island Credit Union to authorize and pay overdrafts on your ATM and everyday debit card transactions, no action is needed.
Frequently Asked Questions (FAQ)
The Human Element
The image accompanying this article depicts a cheerful black family having fun at home, parents tickling their daughter.
This image serves as a reminder that financial decisions impact real people and families. Understanding overdraft practices can help you manage your finances responsibly and avoid needless fees.
