Our Overdraft Protection Services Have You Covered
An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. Liberty FCU can cover your transactions several ways:
Overdraft Protection Plans
Liberty FCU checking account holders can choose to receive coverage from a designated regular share account. With this overdraft protection option, when you have insufficient funds, a transfer is made from available funds in your savings to your checking account so that the item can be paid. A small $4 fee is assessed for the transfer. Items clear your account individually; therefore, there is a separate fee for each item.
You can also apply for an overdraft protection loan so that funds can be advanced from a credit line to your checking account for a $4 fee, plus interest on the loan balance. If you wish to apply for an overdraft line of credit, click here. Unless you instruct us otherwise, transfers will occur first from savings; then from an overdraft protection loan, if available; and then from courtesy pay. You may also notify the credit union if you do not wish to receive the courtesy pay program coverage, wish to cease coverage from an existing line of credit loan, or wish to remove your designated regular share account coverage.
Courtesy Pay Standard Overdraft Protection
Liberty FCU will authorize and pay overdrafts for the following types of transactions for accounts that qualify:
- Checks and other transactions made using your checking account number.
- Automatic bill payments made using your checking account or debit card number.
We pay overdrafts at our discretion which means we do not guarantee that we will always authorize and pay any type of transaction. If we do not authorize and pay an overdraft, your transaction will be declined. When using Courtesy Pay, your account will be taken to a negative balance. You must bring your account balance to a positive balance within every 30-day period for a minimum of 24 hours.
Liberty FCU will not authorize and pay overdrafts resulting in a fee for the following types of transactions unless you opt in for this coverage:
- ATM transactions
- Everyday debit card transactions
To opt in, please contact our Member Service Call Center at (812) 477-9271 or 1-800-800-9271 or visit any Liberty FCU branch. You can change your designation at any time.
Overdraft Protection Comparison
|Type of Coverage||Program||Fee Per Occurrence||Provided Automatically||Limits|
|Standard Overdraft Practice||Courtesy Pay||$27.00||Yes, for accounts that meet qualifications||The amount advanced must be repaid within 30 days or future items will not be covered by the Courtesy Pay program|
|Overdraft Protection Plan||Loan Transfer||$4.00 plus interest on loan||Must apply and qualify for loan||Available credit limit|
|Overdraft Protection Plan||Regular Share Transfer||$4.00||Must be Designated||Available regular share balance with maximum 6 automatic transfers/month|
To manage your Liberty FCU accounts and avoid fees, it’s important to understand the following information.
Account Balance for Overdrafts
Your checking account has two kinds of balances: the “current” balance and the “available” balance. You can review both balances when you review your account online, at an ATM, by phone or at a branch. We use your available balance when determining whether a transaction will cause your account to overdraw and for charging overdraft fees.
The information below explains how your checking account balance works – including the differences between your current balance and your available balance.
Your Current Balance
Your current balance is the amount of money that is actually in your account at any given time. Your current balance reflects transactions that have “posted” to your account but it does not include transactions that have been authorized and are pending. While it may seem that the current balance is the most up-to-date display of the funds that you can spend from your account, this is not always the case. Your account may have purchases, holds, fees, other charges, or deposits made on your account that have not yet posted and, therefore, will not appear in your current balance.
Your Available Balance
Your available balance is the amount of money in your account that is available to you without incurring an overdraft fee. Your available balance takes into account holds that have been placed on deposits and pending transactions (such as pending debit card transactions) that we have authorized but that have not yet posted to your account.
Difference between Current and Available Balance
Your available balance reflects any authorization holds or deposit holds and is used by us to determine available funds when transactions attempt to clear your account. The balance we use as transactions clear is called your available balance and includes all items that have cleared your account up to that point and reflects any items on hold. If your available balance is not sufficient to cover a transaction, we may pay the item and charge you an overdraft fee. An overdraft fee may be charged even though your current balance indicates a positive amount.
Example of Overdraft Fee for Insufficient Available Balance
If your current balance and available balance are both $100 and you swipe your debit card at a restaurant for $35, a hold is placed on your account and your available balance will be reduced to $65. Your current balance is still $100 because the transaction has not yet posted to your account. If a check that you had previously written for $75 clears through your account before the restaurant charge is sent to us for processing, you will incur an overdraft fee. This is because your available balance was $65 when the $75 check was paid. In this case, we may pay the $75 check and charge you an overdraft fee that will be deducted from your account, further reducing your balance. An overdraft fee may also be assessed when your $35 debit card item posts to the account.
The Posting of Transactions to Your Account
There are two main types of transactions in your account – credits or deposits of money into your account and debits or payments out of your account. It is important to understand how each transaction is processed so that you know how much money you have available for use in your checking account.
The information below describes how we process credits and debits to your account and the resulting impact on your available balance. The information is a general description of how certain types of transactions are posted. We may receive multiple deposit and withdrawal transactions on your account in many different forms throughout each day. This means you may be charged more than one overdraft fee if we pay multiple transactions when your account is overdrawn.
Most deposits are added to your account when we receive them. For some checks you deposit, only $225 will be made available at the time of deposit and the remainder will be available two (2) business days later. Additionally, there may be extended holds on checks over $5,525. Thus, your available balance may not reflect the most recent deposits to your account.
You can make several types of debit transactions from your account. Keep in mind that there are many ways transactions are presented for payment by merchants and other financial institutions and we are not necessarily in control of when transactions are received and posted to your account.
Debit Card Authorization Hold
Merchants place a temporary hold on your account for a set amount that can be more than the actual amount of your purchase made when you use your debit card to conduct a transaction. This amount is placed on hold and removed from your available balance immediately. The hold is released after approximately 72 hours or when the transaction clears, whichever comes first. The hold helps determine the available balance on your account. Debit card authorization holds typically apply to debit card transactions when you sign your name or do not enter a PIN. For example, a debit card purchase made at a restaurant or with an online merchant would be treated as a Signature/Credit transaction and would be subject to an authorization hold. Debit card purchases and ATM withdrawals made using a PIN typically subtract the funds immediately from your account (except for when you use your PIN at a gas station).
Payment Order of Items
The law allows Liberty FCU to pay items, such as debit card transactions, electronic withdrawals, checks, drafts, and checks converted to electronic items, drawn on your account in any order. When processing checks, we pay them according to the dollar amount and pay the smallest items first. The order in which items are paid is important if there is not enough money in your account to pay all of the items that are presented so that you will incur fewer overdraft and other fees. Because debit card transactions, electronic withdrawals, and checks converted to electronic items may be presented throughout the day, our policy is to post and pay these transactions in the order they are received.
When an item is presented, we may at our discretion pay the item creating an overdraft or return the item, depending upon your available balance. If an item is returned for insufficient funds, the merchant may present the same item multiple times for payment. Each time that item is presented for payment with an insufficient available balance, your account will be charged an insufficient funds fee. Account holders should keep records and manage their accounts by balancing their statements monthly to avoid writing checks, using their debit card, and authorizing any other type of withdrawal without sufficient funds and incurring the resulting fees. We also encourage you to monitor your current and available balances in online banking.