Understanding Overdrafts and Avadian’s Overdraft Solutions
We all make mistakes, right? That’s where our overdraft solutions come in.
Overdrafts, Available Balances, and Holds
An overdraft occurs when the available balance in your account is insufficient to cover a transaction, but we pay it anyway.
Your available balance is the amount of money in your account that is available to use. It is your current balance less: (1) holds placed on deposits, (2) holds on debit card transactions or other transactions that have been authorized but have not yet posted or settled, and (3) any other holds. (What’s a hold?)
What Happens If You Overdraw Your Account
One of two things happens when you overdraw your account: we authorize and pay the transaction (with you paying us back and possibly incurring a fee) or we decline the transaction.
We have two overdraft solutions by which we may authorize and pay overdrafts: Courtesy Pay and Overdraft Protection.
Courtesy Pay
The first solution by which we may authorize and pay overdrafts is Courtesy Pay. It is a service through which we authorize and pay the transaction, at our discretion, even when the funds aren’t available in your account.
It’s important to know that, because Courtesy Pay is a discretionary service, we cannot guarantee that we will always authorize and pay any transaction.
What Standard Courtesy Pay Covers
With our standard Courtesy Pay practices on checking accounts, we will authorize and pay for overdrafts, up to your discretionary limit (what’s my discretionary limit?), on these kinds of transactions:
- Checks
- Automatic bill payments
- Recurring debit card transactions, like your health club dues, insurance premiums, etc.
- ACH payments (Automated Clearing House)
At account opening, you will also be asked whether you wish to authorize expanded Courtesy Pay practices under which, up to your discretionary limit, we will authorize and pay for the following transactions:
- ATM transactions
- Everyday debit card transactions, like one-time debit card transactions at retail or grocery stores
If you do not authorize these expanded Courtesy Pay practices, we will not authorize and pay them, resulting in declined transactions.
You may change your authorization at any time by visiting an Avadian branch, calling 1.888.AVADIAN, or selecting “Overdraft Coverage” under “Account Actions” in online and mobile banking. You may also complete the form and mail it to our Contact Center, P.O. Box 360287, Birmingham, AL 35236-0287.
Fees Associated With Courtesy Pay
A fee of $30 may be charged for each transaction we cover through Courtesy Pay. Whether you are assessed a fee is determined by your available balance after we cover your transaction.
You pay no fee when the transaction results in your account’s available balance being overdrawn between $.01 and $10.00.
You pay a $30 fee when the transaction results in your account’s available balance being overdrawn in excess of $10.00.
You may be charged multiple fees on a single transaction if the transaction is re-presented for payment.
Overdraft Protection
The second way we authorize and pay overdrafts is through Overdraft Protection. This links your Avadian checking account to another Avadian account, such as a savings account or a previously established personal line of credit (or both).
In the event that you overdraw your account, funds are transferred automatically from the linked account to your checking account. You avoid declined transactions, NSF fees, and Courtesy Pay fees. (Of course, this means you need to have enough money in your linked savings account to cover the overdraft. It is also important to know that we will not transfer out funds that would take your savings account below the $5.00 minimum balance required to maintain your Avadian membership (also known as “par value”).)
You can have Overdraft Protection in conjunction with your authorization of expanded Courtesy Pay.
Fees Associated With Overdraft Protection
We will charge you a $5 fee every day transfers are made from a savings account.
Transfers from a personal line of credit are not assessed a transfer fee. You will, however, be charged interest on the money transferred based on the terms of your personal line of credit.
Declining the Transaction: Non-Sufficient Funds (NSF)
If you’ve written a check, made an ACH transaction, or made a recurring debit card transaction and we decline the transaction because you’ve exceeded your discretionary limit, the item will be returned or declined, and you’ll receive a Non-Sufficient Funds (NSF) fee. (You may also face fees and more from the transaction’s recipient.)
If it is an ATM or “everyday” debit card transaction like at the grocery store, the transaction will be declined at the counter.