The 1, 2, 3’s of ODP

Overdraft Protection can really come in handy when you need it most! Having a backup plan for checking account mishaps is a wise choice.  Here are your ODP options at Interior Federal:

1. Savings Account

As a member of Interior Federal, you will automatically have a savings account. When you open your checking account, it is automatically set up with your savings account as a default for overdrafts. All that is required from you is to make sure there are enough funds to cover the fee and dollar amount you overdrew from your account. This is a $1 fee, as opposed to the $28 overdraft privilege fee.

2. Personal Line of Credit (PLOC):

A PLOC is an excellent way to protect yourself from accidental overdrafts. It is always a sinking feeling when you are at the checkout line and your card is declined. Setting up a personal line of credit as your first line of defense against overdrafts can save you in more ways than one. First, your card isn’t decline at checkout. Two, instead of a $28 fee, it’s free! The transfer of funds from your PLOC to your checking account has no additional fees. It is important to note that the amount that was transferred out of the PLOC will begin accruing interest immediately, so it’s best to pay that off as quickly as possible. However, even if you do wait a couple of weeks, that interest will be minimal. You can calculate your interest on that balance based on your contracted rate of your Personal Line of Credit. Three, a PLOC is a great thing to have in case of emergencies, and we aren’t only talking about overdrafts. You can use your PLOC for anything, from home repairs to medical bills, or a fun family vacation! Don’t just protect your checking account from overdrafts but protect your finances too!

3. Overdraft Privilege (ODP)

For your third and final option, you can opt-in to overdraft privilege on your checking account. ODP is a service that covers your overdrafts when making payments from your checking account. How it works: you make a purchase and it’s more than what your balance is. Overdraft Privilege will kick in and the Credit Union will cover the extra cost up front. ODP also applies to checks and automatic bill payments, so instead of your check bouncing it will sail right through without a second look. While there is a fee of $28 each time, it saves you from having to use another check and a bounced check fee from the payee. We do limit the use of ODP to $500, and the Credit Union can suspend your privilege if overdrafts happen frequently and a balance begins to accumulate. You have 14 days to repay without other penalties.

Now that you know your options, are you ready to implement checking account protection to save you embarrassment at checkout?

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