Had a tiny (<400) overdraft covered just minutes later. Called bank, they said the payment causing the overdraft wouldn't post for 24 hours. Don't remember if that was policy, or something the person would do for us.
Several months later, I learned at that time, that they had instituted a standing stop payment order to the merchant we were paying, but only in the amount of exactly $600. Fast forward, we make a $600 payment, get a notification that it went through, no notification of stop payment, but later a notification from the merchant we were trying to pay (Synchrony - Amazon Store Card) stating they were closing our account due to the stop payment.
Meet in person with a bank rep. They have trouble finding the problem, but once found, argue that we must have requested this specifically, for they would never have done such a thing. I didn't even know a standing stop payment for a specific amount was a thing, asked what is normal policy, what bank terminonlogy would cause such a thing. Would not give any answer other than "you must have asked for it". What would I have said? "You must have asked for it" etc.
Currently fighting with the bank for audio of the phone call where they claim we requested this, and with Synchrony telling them it is the bank's fault. We immediately paid balance on closed Synchrony account, and had made ~12 payments successfully before the inadvertent stop payment.
In the US this always seems to be called "overdraft protection", as in "do you want overdraft protection on your account?"
I can never remember if overdraft protection means "we won't let your account overdraft", or "we will let your account overdraft"
It is an incredibly confusing name to me
I could look up the answer now, but I know I will just forget it again. I must have looked it up and then forgotten at least 10 separate times over the years
Normally means that if your checking accout balance hits zero, they will pull from your savings account rather than returning a check presented for payment. They may (probably will) still charge you a fee when this happens, but it might be less than an overdraft.
Or, it might be a case where they grant you a short-term personal loan to cover the overdraft (up to some limit) rather than return checks. Again there will be fees and interest on this.
In either case, since they are not rejecting payments, you avoid getting hit with fees from whomever you wrote the check to. So your only fees/penalties are paid to the bank.
Of course the best answer is just keep better track of your checking account balance.
Of course, the funny part about that is that they charge you to check your balance at the ATM. It's almost as if they don't want you to and have to pay their fee.
Which of course is about as odorous fee as possible. You don't have enough money, so we're going to charge you more money?
It probably depends on the bank, but setting one's overdraft limit to zero doesn't necessarily help and may actually make things worse: some payments may still go through even if you don't have the funds, putting you in unauthorised overdraft, which tends to have a high daily fee.
When one of my sisters got her first paycheck from her first real job, she didn't knew much about banking, and thought that the overdraft limit on the ATM was her actual salary, so she just withdrew the whole thing. I think it took over a year, maybe two, to pay it all back.
Several months later, I learned at that time, that they had instituted a standing stop payment order to the merchant we were paying, but only in the amount of exactly $600. Fast forward, we make a $600 payment, get a notification that it went through, no notification of stop payment, but later a notification from the merchant we were trying to pay (Synchrony - Amazon Store Card) stating they were closing our account due to the stop payment.
Meet in person with a bank rep. They have trouble finding the problem, but once found, argue that we must have requested this specifically, for they would never have done such a thing. I didn't even know a standing stop payment for a specific amount was a thing, asked what is normal policy, what bank terminonlogy would cause such a thing. Would not give any answer other than "you must have asked for it". What would I have said? "You must have asked for it" etc.
Currently fighting with the bank for audio of the phone call where they claim we requested this, and with Synchrony telling them it is the bank's fault. We immediately paid balance on closed Synchrony account, and had made ~12 payments successfully before the inadvertent stop payment.