Understanding Overdrafts

Many people face overdrafts, which happen when you do not have enough money in your checking account to cover a transaction and alternate funds are used to pay it. A fee may be charged for an overdraft item, but there are ways to handle overdrafts that do not result in fees.

Read on to learn about how you can be ready if an overdraft happens to your nw+ checking account.

The Difference between “Available Balance” and “Current Balance”

Understanding the difference between “available balance” and “current balance” is important when discussing overdrafts.

Current balance is the total amount of money in your account.

Available balance is the amount of money available to pay transactions from your account. It is calculated by subtracting holds on deposited funds and pending transactions from your current balance.

Your available balance may be less than the current balance. NW+ authorizes and pays transactions using your available balance.

You can see both your current balance and your available balance on the nw+ mobile app or your nw+ online banking page. Use the available balance to know how much money is available to spend.

Please note: the mobile app uses the term “ledger balance” instead of “current balance,” but both terms mean the same thing.

Handling overdrafts

There are several ways you can handle overdrafts on your nw+ checking account. We encourage you to learn about these options and prepare now, before an overdraft happens.

1. Avoid overdrafts by monitoring your account balance and activity

Continually monitoring your account is a great way to avoid overdrafts. You can use the nw+ mobile app or the online banking feature on our website to track your account balances. Both the app and the website show your available balance. Use the available balance to decide how much money is available to spend.
Use the “Cards” feature in the nw+ mobile app to see transaction information for your nw+ debit card, including pending and posted transactions. You can also use this feature to see more details about each transaction, set spending limits and alerts, instantly lock and unlock your card, and more.

2. Use a linked account to cover overdrafts

An affordable way to prevent overdraft fees is to link another nw+ account to your checking account. This can be a savings account, a line of credit loan, or another nw+ account you own.

Linking an account permits us to transfer money to your checking account to cover transactions that cause your available balance to fall below $0. There is no fee for overdraft transfers from a linked account.

Revolving lines of credit such as timeline or HELOC loans can be attached to your checking account. Funds from a line of credit loan used to cover overdrafts accrue interest and must be repaid. Check our Rates page for current rates on new lines of credit.

3. Use Courtesy Pay Overdraft Protection

NW+ offers Courtesy Pay overdraft protection. Individual and business accounts in good standing may qualify for a Courtesy Pay limit of $1,000 of overdraft protection. Courtesy Pay comes with most nw+ checking accounts, when qualifications are met.

Members can also opt into additional Courtesy Pay coverage for a single debit card and ATM transactions.

Transactions covered by Courtesy Pay may incur a $28 overdraft fee, which counts against the $1,000 overdraft protection limit. The $28 Courtesy Pay fee is less than the amount charged if a transaction is returned as unpaid, usually referred to as a NSF (Non-Sufficient Funds Fee) and could potentially be less than fees from the original payee.

To qualify for Courtesy Pay you must meet these qualifications:

• Primary account owner must be at least 21 years old
• Checking account must be open for at least 90 days (must not have a negative balance within the 90 day New Account Period and must deposit at least $3,000 during the New Account Period)
• Single monthly direct deposit of at least $500
• No nw+ loans more than 16 days past due

Please see our Courtesy Pay Program Disclosure for additional important details.

4. Opt out of overdraft protection

If you do not link another nw+ account to your checking account and you opt out of Courtesy Pay or don’t meet the qualifications, items that exceed the available balance may go unpaid or be denied at point of sale and may lead to non-sufficient funds fees. Please see our Service Fees page for current fee amounts.

Bottom line

At nw+ we understand that things don’t always go as planned. Nobody wants to overdraw their checking account, but sometimes it happens. Visit your local nw+ branch, or call us at (425) 297-1000 if you would like more information on handling overdrafts