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How to Prevent and Manage Overdraft Fees

Definitions
Overdraft – An overdraft occurs when the bank pays a transaction exceeding the money available in your account resulting in a negative balance.
Non-Sufficient Funds – Non-sufficient funds (NSF) occur when an item (a check or other transaction) is returned unpaid due to not having enough available money in your account to cover it.
Ozona Bank OD/NSF Fees – up to $29 each time an item is presented, whether it is paid (overdraft) or unpaid (NSF).

What is an overdraft?
An overdraft occurs when you don’t have enough money available in your account to cover a transaction, but the bank pays it anyway.
For example, let’s assume you have $40 in your account. You spend $10 using your debit card. You now have $30 available. Then a check for $50 you wrote to the utility company is presented for payment. The check may be paid or returned, and this could cost you expensive fees. If your account becomes negative as a result of this decision, whether it is paid (overdraft) or unpaid (NSF), the amount you are overdrawn plus Ozona Bank’s fees will be recovered automatically from future deposits, including from payroll deposits made by your employer, government benefit deposits, and other direct deposits on which you may depend. These deductions will further lower your account balance and may increase the risk of more overdrafts and costly fees.

ATM and Point of Sale Debit Card Purchases
Federal regulations provide certain protections for bank customers when their deposit account(s) are overdrawn. Customers have a choice whether to extend Ozona Bank’s overdraft program to be available for one time debit (Point of Sale/POS) or ATM transactions. By choosing to opt-in, accountholders participating in the Overdraft Privilege Program* can choose to use their debit card for transactions which exceed their account balance; however, an overdraft fee would be charged.
If you do not opt-in, Ozona Bank will decline your ATM withdrawals and debit card transactions at POS terminals if you do not have enough money in your account to cover the withdrawal or purchase. If you do not opt-in but the bank pays an ATM or POS item when your account is overdrawn, the bank cannot charge you an overdraft fee.

Checks and Other Transaction Account Payments
For other transactions that would cause you to exceed your balance, such as a check or recurring payment automatically deducted from your account, Ozona Bank can choose whether the transaction will be paid or returned unpaid. If Ozona Bank decides to pay the transaction, an overdraft fee of up to $29 may be charged. If the bank decides to return the transaction unpaid, a non-sufficient funds (NSF) fee of up to $29 may be charged and the merchant might also charge you a returned check fee.

Ways to Avoid Costly Overdraft Fees
You can protect yourself from costly overdraft fees by:

  • Watch Your Balance. Careful recordkeeping, whether by use of a paper or electronic transaction register, may significantly reduce, or even eliminate the likelihood of being charged such fees. Remember to log all transactions: deposits and withdrawals including one-time and recurring payments which could be fixed or variable amounts. Be sure to include all payment methods. Utilizing Ozona Bank’s free online or mobile banking can help with this. It also may be a good idea to keep a cushion of funds in your account, when possible, to help prevent unintended overdrafts.
  • Enable Digital Alerts. Email or text notifications can be set up using online or mobile banking. These notifications can be used to provide your balance daily as well as to alert you if your balance falls below an amount specified by you. For example, you could receive an email or text if your balance falls below $30. This should prompt you to add funds to your account before additional withdrawals are presented.
  • Link Your Accounts. For those customers who have multiple Ozona Bank accounts, it is possible to link them for overdraft protection**. For example, if you do not have enough money in your checking account to cover a transaction, with an established Overdraft Protection Transfer, the bank will automatically transfer funds from your linked savings account to cover the difference. This can save you money since Ozona Bank charges a smaller fee of $5 per transfer. This option is useful only if you have enough money in the linked savings account to cover the transaction.

Avoiding overdrafts is easier than you may think, and Ozona Bank can help. We are here if you have questions or want to talk about your account(s), including managing overdrafts. More information about locations and hours is available under Locations via the Contact menu above.
To learn more about smart ways to manage your money and enhance your financial skills, complete the free FDIC Money Smart financial education program online through www.fdic.gov/moneysmart. You may also find financial education workshops or individualized counseling in your area.

*Contact your Ozona Bank branch for more information regarding our Overdraft Privilege Program.
**Contact your Ozona Bank branch for more information regarding Overdraft Protection Transfers.