How to Avoid Overdrafts

We review our overdraft report daily, and do not charge an overdraft fee on your account when we determine that your account is overdrawn by a total amount less than $10. We typically pay most checks for a fee. We also offer several services to help you avoid overdrafts and keep your checking account in the black:

1. Link with Savings
   Automatically pull funds from your savings account¹ when your checking account goes negative.
   
   
2. Link with Personal Line of Credit
   You may apply for a Personal Credit Line (PCL). If you meet the underwriting standards, the PCL will be set up for you. You may then link your PCL to your checking account. If an overdraft occurs, a transfer will be made from your PCL to your checking account. There is an annual fee for a PCL.
    
3. Opt-Out of Overdraft Services
   If you’ve experienced repeated difficulty with overdrafts, My Bank First United will honor your request to decline coverage of overdrafts (i.e., opt-out) resulting from any non-electronic transactions; such as checks. This opt-out means items presented against insufficient funds will be returned as applicable by law. Any previous “opt-in” request to our Standard Overdraft Protection will be discontinued which may result in ATM or Point of Sale transactions being rejected or declined at the time of transaction. Customers are responsible for the return items charges from My Bank First United, as well as any charges from the merchant for return of the item. Most customers prefer to avoid these additional charges and the embarrassments of declined payments, so this opt-out is intended as a last resort in special circumstances. This option may not result in a reduction of fees.

Smart Banking

In addition to our overdraft services, it’s important to practice smart spending and responsible money management to avoid overdrafts and other issues. Here are a few handy tips for keeping an eye on your balance and spending wisely:

1. Personal Internet Banking. Track your transactions and keep an eye on your balance with Personal Internet Banking. You can log in anytime, from anywhere, to see how much you have available in your account.
    
2. Alerts. Our Personal Internet Banking lets you set up alerts that let you know when you’ve hit a critical low balance in your checking account, preventing you from overdrafting and giving you time to make a deposit or transfer before making additional purchases.
    
3. Sign up for Direct Deposit. Your funds will be available immediately, so there’s no risk of spending unavailable funds.
    
4. "Cushion" your checking account. Keep a cushion balance in your checking account, and use Alerts to notify you when you hit that cushion balance, so you can make a deposit or transfer. If you never get down to zero, you can’t go below zero!
    
5. Balance your checkbook weekly. Don’t wait until your monthly statement arrives. With Personal Internet Banking, you can easily track your transactions in real time, so you can have an accurate current balance in your pocket at all times.
    
6. Swipe mindfully. Keep track of your ATM withdrawals and debit card purchases, and record them in your check register as soon as possible.
    
7. Don’t forget about automatic bill payments. If you have recurring bill payments scheduled through Personal Internet Banking, or with another institution, make sure you’re accounting for these as you track your balance each month. It’s a good idea to record these payments at the beginning of the month, even before they are paid, to ensure the funds are available.
    
8. Talk about it. If you have a joint checking account, make sure you and the other account holder(s) discuss your planned expenses and the current balance on a regular basis.
    
9. Wait for deposits to clear. Electronic check processing makes funds available faster, but you should still wait until a deposit officially clears before spending the funds. Use Personal Internet Banking or Telephone Banking to get an updated available balance.
    
10. Don’t float checks. Don’t write a check unless you know you have the available funds to cover the amount. Today’s electronic check processing is faster than ever, meaning a check may be presented for payment sooner than you expect.
     
11. Don’t post-date checks. Post-dated checks can legally be presented for payment before the post-date, meaning you may not yet have funds available to cover the check.
     
12. Pay with cash. If you have cash, you have available funds! Paying with cash is a great way to see your spending in a new way, and will prevent you from spending money that you don’t have.

Overdraft Rules for Debit and ATM Cards

Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. As of July 1, 2010, First United and other financial institutions must offer you the ability to make decisions about overdraft services for transactions made with your debit or ATM cards.
 
Here are some key things you need to consider when reading the notice:;

The Basic Facts

Types of overdraft services. An overdraft occurs when you make a purchase or ATM transaction but don't have enough money in your account to pay for it. For a $40 fee, First United's overdraft services will cover you when you become overdrawn. This fee can apply to each time you overdraw your account.

Generally, there are two types of overdraft services:

• Standard overdraft services. First United will cover your transaction for a fee of $40 each time you overdraw your account. For example, if you make a purchase with your debit card for $150 but only have $100 in your account, your account will be overdrawn by $50 and First United will charge you a fee. If you then make an ATM withdrawal for $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, you would pay a total of $80 in fees.
   
• Overdraft protection plans. First United offers a Personal Credit Line to cover transactions when you overdraw your account. 

The New Rules

• You choose. In the past, some banks automatically enrolled you in their standard overdraft services for all types of transactions when you opened an account. Under the new rules, your bank must first get your permission to apply these services to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).  You can see this form by clicking here.
   
• Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.
   
• Checks and automatic bill payments. The new rules do not cover checks or automatic bill payments that you may have set up for paying bills such as your mortgage, rent, or utilities. First United may still automatically enroll you in their standard overdraft services for these types of transactions. If you do not want your bank's standard overdraft services in these instances, give us a call or stop in; you may have the option to cancel.

This information was obtained from the Federal Reserve, click here to view the original content.