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Important fee update and tips on avoiding overdrafts

How can we help you avoid difficult money situations and put you in the best financial position for success? This question is at the heart of so many things we do here as your financial partner – including our decision to eliminate the  non-sufficient funds (NSF) fee as of April 1.

What does this mean for you? And how is the NSF fee (now gone) different from the overdraft fees that are staying the same? We get it – this stuff can be confusing. Here’s more information to help answer your questions and avoid fees.

When do “NSF” and “Overdraft” come into play?

Both of these things refer to spending more money than what’s in your checking account. Suppose you’ve set recurring automated payments for your utilities bill and it’s $250 per month. But one month, the payment gets run when there’s $25 in your checking, coming up $225 short. That payment would put your account balance below $0, or in the negative.

Here’s how things would play out next:

  1. First, we’ll try to protect you from the overdraft. We’d do this by transferring money from your linked savings account (or an Overdraft Protection Line of Credit if you’ve applied for and gotten that). If there’s enough funds in that linked account, your utilities bill is paid and there’s just a $3 trasnfer fee.1
  2. Not enough money in a linked account to pay the charge? We’d still pay the charge on your behalf and allow the account to go negative, applying an Overdraft Courtesy Pay fee of $281 (if you’ve qualified for this service and not opted out). This fee is in place because by paying the item when you don’t have the money for it, we’ve extended you those funds and trust that you’ll bring your account balance positive soon. We also don’t charge a fee if your account balance stays negative, which is common at many banks.
  3. Don’t have Overdraft Courtesy Pay? In this case, we don’t pay the utilities charge on your behalf and instead return your payment, not letting your account go negative. You won’t get a fee – because this is the “NSF” fee we’ve eliminated. You may have heard this situation called a “bounced check,” even though you’re paying electronically and not with a physical check in this example (could also refer to a bill pay payment). Heads up that the utility company may charge you a fee for the returned payment.

How to avoid overdraft fees and overspending your account

We understand money gets tight. And we also understand mistakes happen. We’re never here to judge and only come from a place of wanting to help! Here are some things you can do to make sure fees and overspending don’t get in the way of your goals:

  • Keep an eye on account balances. We try to make this easier by giving you anytime, anywhere access to your accounts through online and mobile banking. (It’s good to watch your accounts regularly for fraudulent purchases anyway.) Remember to factor in recurring automatic payments that may not always show up in real time.
  • Cushion your savings account. Why your savings? Because before we charge an overdraft fee, we’ll transfer money in $50 increments from your savings account to cover it. The transfer fee is only $3.1
  • Open an Overdraft Protection Line of Credit. This ensures funds are there to cover an overdraft, regardless of what’s in your savings account. Again, you won’t pay an overdraft fee, just $3 for each transfer1 from your line of credit.
  • Opt out of any Summit overdraft courtesy pay. If you opt out of overdraft courtesy pay that you might have opted into or otherwise qualified for, we’ll return your checking account transactions and not pay them on your behalf. Remember, there’s no fee anymore for this because it’s an “NSF” transaction. The downside to this is that your payment won’t be made and you could have a charge from the business or individual what was expecting your payment.
  • Open our Balance Checking. There’s no overdraft fees, ever, with this checking account – payments are automatically returned if there’s not enough money to cover them.
  • Set up account balance alerts. You can set alerts in your online banking to remind you when your checking hits a certain balance. This gives you a chance to add money to your account before making purchases.
  • Sign up for direct deposit. Having your employer deposit your checks directly into your Summit account gives you faster access to that money.
  • Use Climbr®. It’s your very own free personal financial management tool from Summit! And beyond helping you budget, it can alert you to upcoming bills and show your balances and transactions.

The most important thing to remember? We’re here to help empower you with your money, whether you want to work on a budget together or a plan to build up your savings. Reach out to us and let’s talk about how we can help. It’s one more way we’re helping you stay ahead of your money and taking that total member savings of $29.9 million* even higher!

1 See our fee schedule for more information. Non-sufficient funds still apply to Business Checking accounts.
*Average primary savings over the cost of doing business with a for-profit banking institution in WI. Your savings may vary based on your creditworthiness and other factors.

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