At NY TEAM Federal Credit Union, we offer two services to assist our members with insufficient fund items that lead to overdrawing their checking account: overdraft protection and courtesy pay. Although they may appear alike, there are some significant differences between the two.

Overdraft protection is available on all checking accounts and uses funds that you already have in a savings account or any other account belonging to you. We can cover your overdrafts in two ways. One is through standard overdraft protection, which links your checking account to another account, such as a line of credit loan. When you overdraft your checking account, money is automatically transferred from the linked account to cover the overdraft. While this can be a convenient way to avoid Courtesy Pay fees, there are still fees associated with the transfer, and you may be charged interest on the borrowed funds.

Courtesy Pay, on the other hand, is an added protection to checking accounts that covers non-sufficient funds up to an approved limit of $500. Members must opt-in to receive debit card Courtesy Pay coverage. This service is available for checking accounts that meet our criteria. Members are given the option to opt-out if they do not want the coverage to be extended with their debit card usage.

To decide which service works best for you, take into account your individual needs and circumstances. If you have a reliable source of funds to cover any potential overdrafts, such as a savings account or line-of-credit loan, overdraft protection may be the better choice for you. If you opt for Courtesy Pay, there is no daily interest charged, and you have ten days to bring your account back to a positive balance.

To learn more about these services or for additional regulations regarding courtesy pay, please contact a NY TEAM FCU Representative.