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What You Need to Know

Payments and purchases made by you for more than the available balance in your Provident checking account can result in the transactions being declined, paid by us and causing your account to become overdrawn, or returned unpaid to the financial institution who first accepted the item.  If we decide to pay the transaction and your account becomes overdrawn, we may charge you an overdraft fee.  If we decide to return the transaction unpaid, we will not charge you a non-sufficient funds (NSF) fee, however, the merchant and/or others to whom the item was presented for payment may charge you a returned check or other fee.

Accordingly, it’s important to understand the distinction between overdraft fees and NSF fees.  In general, overdraft fees occur when a financial institutions pays an item even though the customer’s account does not have enough funds available to cover the transaction.  Alternatively, NSF fees occur when the customer’s account does not have enough funds available to cover the transaction and the financial institution returns an item unpaid.

Overdraft fees can add up quickly and we want to provide information to help you avoid them.

But first it is important to understand how and when your checking account transactions are processed and fees are assessed, as the type of payment or purchase method you use determines the time it takes for the transaction to be deducted/paid from your account.


Transactions that can be posted and cleared through your checking account vary based on the types of transactions you authorize and/or conduct, as well as the services that you have signed up for.  Regardless of the type of checking account you have, all accounts receive deposits or electronic credits; these transactions are processed by us each day.

Following the processing of your deposited items and electronic credits received, we process the payments that you have made (such as checks that you write or issue, ATM withdrawals/transfers) or authorized (such as point of sale debit card purchases, preauthorized automatic debits, and online bill payments).

It is important to understand that the exact amount of some payment types you authorize or make, such as point of sale debit card purchases, are unknown to us until the merchant actually settles the final purchase amount with their bank, the final purchase amount is sent to us, and the funds are withdrawn from your account.  For many point of sale transactions (such as gas purchases, hotel stays, and car rentals), merchants will request authorization for the point of sale purchase that may not be the exact final purchase amount, and in many cases, is less than the final purchase amount.  This will affect the amount of money available for other payments that you make or have authorized, including those payments that you have preauthorized, scheduled in advance, or conduct in person.  It can also give the appearance that your available balance (the amount of money actually available to you for withdrawals and other purchases) is greater than it actually is, which can lead to overdrafts and related fees.

The following table is a general guide to understanding transaction processing activities, transaction amounts, and impacts on overdraft fees.

CHECKS When the check is presented to us for payment At the time the check is posted to your account The day the item is received by us; can occur throughout the business day Yes; an OD fee can be charged
ATM WITHDRAWAL OR TRANSFER At the time the withdrawal or transfer is made At the time the withdrawal or transfer is made While you are at the ATM Yes; an OD fee can be charged
ONE TIME POINT OF SALE/DEBIT CARD At the time the transaction is authorized or when the merchant processes the transaction At the time the transaction is settled and posted to your account Up to three business days after the transaction is authorized Possibly; an OD fee will not be charged if the transaction was previously authorized on your available balance; an OD fee will be charged if the transaction is paid using your ODP limit
PREAUTHORIZED REOCCURING AUTOMATIC DEBITS When the transaction is presented to us  for payment At the time the transaction is settled and posted to your account Upon presentment by the merchant Yes; an OD fee can be charged if funds are not available upon settlement
ONLINE BILL PAYMENT At the time the payment is scheduled by you Electronic payment-when the item is scheduled for payment; check payment- when it’s posted to your account Electronic payment-when the item is scheduled for payment; check payment- when it’s posted to your account Yes; an OD fee can be charged if the payee is paid by check

A more detailed explanation as to how we process transactions can be found HERE.


Here are some tips to help avoid overdrawing your checking account and avoid overdraft fees:

  • Track your balance.  To avoid overdrafts and related overdraft fees, you should always track your balance as carefully as you can.  Record every deposit and withdrawal, transfer or payments made (including checks issued, preauthorized online bill payments, recurring transactions such as gym memberships or mortgage, rent or car payments) in your check register (paper or electronic).  Also, if possible, keep a cushion in your account to cover payments that you may have forgotten to record.
  • Reconcile your account statement. Balance your account when you receive your account statement.  This is a good way to learn of unauthorized withdrawals or incorrect payment amounts.
  • Set up account alerts to stay informed. Set up a low balance alert to be notified by email, text message, or push notification as soon as your account balance reaches an amount you specify.
  • Link to a savings account. To reduce the costs of overdrafts, link your checking account to another Provident checking account or savings account.  If you overdraw your checking account, money will be taken from your linked checking/savings account to cover the difference as long as you have sufficient funds available in your linked account.  Currently, there is no charge for this transfer service.
  • Apply for a line of credit. As an alternative to a linked account, apply for an overdraft line of credit to cover transactions that exceed your available account balance. You may have to pay interest on the amount borrowed from the credit line.
  • Use direct deposit for your paycheck. You will have immediate access to the funds from your paycheck to cover payments already made or authorized by you, as well as for withdrawal.
  • Use our Mobile Banking app account features. Bank on the go using your mobile device to monitor your account activity, transfer money and deposit checks using our apps.

Questions? Call us at 800.448.7768 or visit your local branch.

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