How to avoid negative balances and overdrafts

It’s happened to all of us: A budget miscalculation or oversight that resulted in an unexpected shortage of funds. That’s why having overdraft protection is convenient and useful.

When does an overdraft occur?

An overdraft occurs when an account does not have enough of an Available Balance to cover a transaction.

What is overdraft protection?

Overdraft protection provides coverage when transactions exceed the Available Balance in your account. This helps avoid rejected checks, debit card or ATM transactions, and the potential for overdraft fees.

How can I get overdraft protection?

To get overdraft protection, just link up to three eligible accounts1 to your checking account. Then funds can be transferred automatically if you overdraw your account.

Eligible U.S. Bank accounts include:

Set up overdraft protection.

Once you've decided which accounts you want your overdraft protection transfers to come from, you're ready to set up overdraft protection. To do this, simply do one of the following:

How does overdraft protection work?

Once you link your accounts, funds will be automatically transferred from the linked overdraft protection account as follows:

  • If the negative Available Balance in your checking account is $5.01 or more, the advance amount will transfer in multiples of $50.
  • If your negative Available Balance is $5 or less, the amount advanced will be $5. The Overdraft Protection Transfer Fee is waived if the negative Available Balance in your checking account is $50 or less.
  • When the overdraft protection transfer is made from a linked deposit account (U.S. Bank consumer savings account, money market or a secondary checking account), there is no fee.

If the account linked for overdraft protection doesn’t have sufficient funds to cover the overdraft:

  • The Available Balance in the linked Overdraft Protection account will be transferred to reduce the overdrawn amount.
  • If there’s another account linked as Overdraft Protection to your checking account, funds will be transferred from that account in multiples of $50 to cover the remaining negative Available Balance.

For example, let’s say your checking account balance is $42 and the Available Balance in the linked credit account is $1,000. If you write a check for $125, this would overdraw your checking account by $83. We would transfer $100 from the primary account linked for overdraft protection, which includes enough to cover your negative balance and your overdraft protection transfer fee.

Overdraft Protection Transfer Fees (and how to avoid them)

When the overdraft protection transfer is made from a linked deposit account (U.S. Bank consumer savings account, money market or a secondary checking account), there is no fee. For most U.S. Bank checking accounts, this fee is no more than $12.50 if the transfers are made from a linked U.S. Bank credit account (U.S. Bank Reserve Line of Credit, U.S. Bank credit card, U.S. Bank Personal Line, U.S. Bank Home Equity Line of Credit, and/or other lines of credit).

Ways to reduce or avoid overdraft protection transfer fees:

  • Download the U.S. Bank Mobile App to your mobile device or visit usbank.com.
  • Set up account alerts and receive email or text messages when your balance is low or when payments are due. Please be advised that the alerts may not be sent immediately.
  • Monitor your account and transfer funds into your checking account on your own before an overdraft occurs.
  • Enroll your Smartly Checking account in the Smart Rewards program primary tier and above.
  • Explore checking account options by calling 24-Hour Banking at 800-USBANKS (872-2657) or by visiting your local U.S. Bank branch. We accept relay calls.

What’s the difference between overdraft protection and standard overdraft coverage?

Overdraft protection lets you link accounts so you can transfer funds to your checking account if a check, debit card or ATM transaction exceeds the Available Balance in your account.

The term standard overdraft coverage at U.S. Bank refers to how we will handle the transactions. If a transaction takes your account’s Available Balance below zero, we look to your standard overdraft coverage selections to decide how we will handle the transaction. U.S. Bank may authorize and pay overdrafts for these types of transactions for a fee:

  • Checks and other transactions using your checking account number
  • Automatic bill payments
  • Recurring debit card transactions (such as automatic gym dues)

We will not authorize and pay overdrafts for these types of transactions unless you say "yes" to ATM and debit card overdraft coverage:

  • ATM transactions
  • Debit card purchases (e.g., paying for gas at the pump, buying groceries, buying something online)

Each overdraft item we pay on your behalf will be subject to "Overdraft Paid Fees". Please see your Consumer Pricing Information (PDF) disclosure for more information.

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Disclosures

  1. Overdraft account signers – Account holders who are signers on the checking account must also be signers on the account linked for overdraft protection.

  2. Overdraft credit products eligibility – Credit products are subject to eligibility requirements and credit approval and may be subject to additional charges as detailed in the account agreement. Interest will accrue on amounts advanced. Credit products are offered through U.S. Bank National Association.

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Deposit products are offered by U.S. Bank National Association. Member FDIC.