Overdraft fees can be confusing, which leads to frustration for members when an overdraft occurs. CSE has tools to help members when money gets tight, such as:
- Standard Overdraft Practices - i.e., Courtesy Pay that comes with your account
- Automatic Overdraft Protection through a link to your savings account, which may be less expensive than our standard overdraft practices/Courtesy Pay.
What is an overdraft?
An overdraft occurs when a debit/withdrawal transaction attempts to come out of your account when there are not enough funds to cover the transaction. When this happens, there are three possible outcomes:
- CSE rejects the transaction. If this happens, the payment is returned and your account is charged a $25 NSF (Non-sufficient funds) return fee.
- If a member has Automatic Overdraft Protection setup, a transaction that would normally pull your account into the negative would first look at a back-up account that the member has setup. If there are sufficient funds in the back-up account, CSE will automatically transfer sufficient funds to cover the transaction. If there are not sufficient funds, one of the previous two scenarios will play out.
- If a member has Courtesy Pay Overdraft Protection set up, CSE may honor the insufficient transaction. If this happens, your transaction will be paid, and your account will be charged the standard $25 Courtesy Pay fee.
How are our Overdrafts Calculated?
For the purpose of determining whether an overdraft has occurred, we use your available balance. As transactions are processed throughout the day, we add them to, and subtract them from, the actual balance as they occur. Credit transactions are added to the actual balance when the credit transaction settles. Debit transactions are subtracted from the actual balance when the debit transaction settles. Memo-posted EFT debits (i.e., debit transactions that have been authorized but have not yet settled) are subtracted from the actual balance when the transaction is authorized. This determines the available balance at any given point in time for overdraft purposes. Each debit transaction that we process when your account has a negative available balance at the time the debit transaction is processed is an overdraft, subject to an overdraft charge.
Example: Assume your actual and available balances are both $150, and you swipe your debit card at a restaurant for $30. The transaction is memo-posted to your account, reducing your available balance to $120. Your actual balance is still $150. Before the restaurant charge is sent to us for processing, a check that you wrote for $130 is presented for settlement. Because you have only $120 available (there is a hold on your account for the pending restaurant charge of $30), your available balance would be -$10 if we pay the check, even though your actual balance is $150. In this case, since the charge is based on the available balance, you will be charged an overdraft fee. (If we return the check you will be charged an NSF fee.) That fee will be deducted from your account, further reducing the balance.
Automatic Overdraft Protection
Automatic Overdraft Protection is a service in which members have the ability to establish up to two back-up accounts in which CSE will automatically transfer funds to cover transactions that would have resulted in a negative balance. In order for an automatic transfer to successfully occur, there must be sufficient funds in the backup account prior to the transaction occurring. A successful transfer will only occur from one of the two backup accounts.
Example: If you have a transaction pulling your account into the negative by $200, and have one backup account with $100 and a secondary backup account with $100, the transfer will not take place. The $200 must be in one backup account to pull the entire amount of the transaction in question.
Courtesy Pay Overdraft Protection
Courtesy Pay overdraft protection is one more way we can help you meet unexpected financial needs.
At CSE, we understand everyone needs an occasional safety net, which is why we offer Courtesy Pay overdraft protection. Courtesy Pay is a non-contractual service, whereby we may honor your insufficient transactions up to your limit of $400, as long as you maintain your checking account in good standing (view our Courtesy Pay Terms and Conditions). Courtesy Pay does not guarantee that CSE will pay your insufficient item. However, if you have an overdraft, your account will be charged our standard $25 non-sufficient funds (NSF) fee.
If approved, COURTESY PAY overdraft coverage will be automatically available for checks, automatic bill payments and other debit transactions. If you would like overdraft coverage for your ATM withdrawals and everyday debit card purchases, simply ask us.
For more details regarding your options for overdraft coverage, please refer to "What You Need to Know About Overdrafts and Overdraft Fees".
Explanation of Overdrafts
|Non-Sufficient Funds (NSF)
||Non-Sufficient Fund items are items that will be returned or declined payment, as there are not enough funds in an account to cover the transaction. Non-Sufficient Fund items may try to clear your account more than once, resulting in multiple returned items, depending on the merchant.
|Automatic Overdraft Protection
||Automatic Overdraft Protection is available for members to set up one or two accounts as a safety net when transactions try to clear your primary account and the funds are not available. Automatic Transfer will automatically transfer funds from your backup account to cover the transaction, if there are enough funds in the account to transfer.
|Courtesy Pay Overdraft Protection
||Courtesy Pay Overdraft Protection is a discretionary overdraft service. Rather than automatically returning or declining a non-sufficient fund item that you may have, we will consider authorizing and paying your reasonable overdrafts and apply our standard $25 per item to your account.
Want to Avoid Overdraft Fees?
There are a number proactive measures members can take to avoid overdraft fees:
- Setup Automatic Overdraft Protection
- Setup Account Alerts to be notified of transactions and/or low balances
- Keep a registry of all of your account transactions