What are the different types of overdraft and returned item fees—and when are they charged?

Here's a breakdown of when fees may apply if your account doesn't have enough available funds to cover a transaction: Check, ACH, POS (Recurring) Paid No Overdraft Fee charged Check, ACH Rejected or returned No Overdraft Fee charged ATM Withdrawals, POS (Everyday) Rejected or Paid (in limited cases) No Overdraft Fee charged Overdraft Protection Transfers (from linked savings or credit line) Paid No Overdraft Fee charged. Finance charges may apply for credit line transfers. Important Notes: Overdraft Protection transfers occur at the end of our daily processing cycle. If your linked account doesn’t have enough funds or available credit to cover the overdraft, the transaction may be declined or returned, or we may choose to pay it through Discretionary Overdraft if you are opted-in. Credit line transfers are subject to finance charges as outlined in your loan agreement. Merchants and other payees may charge a fee for returned or rejected checks or ACH payments.

What is Discretionary Overdraft?

Once your account has been open for at least 60 days, First Tech may use Discretionary Overdraft to cover certain transactions that would otherwise be declined due to insufficient funds. This includes: Checks ACH payments Recurring debit card transactions This does not include: ATM withdrawals Everyday POS debit card purchases Important notes: We always attempt to use Overdraft Protection before Discretionary Overdraft—if you’re enrolled and funds are available in your linked account(s). Transactions are paid with Discretionary Overdraft at our discretion and are not guaranteed. Only accounts with a primary account holder age 18 or older are eligible for Discretionary Overdraft. For current details on our Overdraft Services, refer to our: Overdraft Policy Disclosure (PDF) .

How does Discretionary Overdraft work?

Discretionary Overdraft is a service we offer our members to help you avoid declined transactions and third-party fees. When deciding whether to cover an overdraft with Discretionary Overdraft, we look at several factors, including: The amount of the transaction Your history of regular deposits The number of past overdraft occurrences Your overall ability to repay the overdraft If we cover a transaction using Discretionary Overdraft: You must repay the overdraft promptly. You cannot defer payment—you’re responsible for bringing your account back to a positive balance. Just because a transaction is paid with Discretionary Overdraft in the past does not guarantee every overdraft transaction will be paid in the future. We reserve the right to decline to pay with Discretionary Overdraft at any time. For more information, refer to our: Overdraft Policy Disclosure (PDF)

What is Overdraft Protection?

Overdraft Protection is an optional service that helps you avoid declined transactions by linking an existing share savings account, line of credit or credit card to your checking account. If your checking account doesn’t have sufficient funds to cover a transaction, Overdraft Protection will automatically transfer money from a linked account to cover the shortfall. Important details: There is no fee for an Overdraft Protection transfer from a linked consumer account(s). Transfers from a linked share savings account are made in $100.00 increments. If your savings account balance is less than $100, we’ll transfer up to the amount available to cover the item(s). Transfers from a linked line of credit or credit card are made to the nearest $0.01. Transfers from a line of credit or credit card may be subject to finance charges as outlined in your loan or credit card agreement. Transfers are only made if you have sufficient funds in the linked account(s) to cover the transaction.

What other financial terms should I know?

Understanding key financial terms can help you manage your account with confidence and avoid unnecessary fees. Here’s a quick guide to some commonly used terms at First Tech: Point of Sale (POS) Everyday Transactions Purchases made with your debit card for day-to-day expenses, like making a purchase at a store, restaurant or online. These are typically not eligible for Discretionary Overdraft. Point of Sale (POS) Recurring Transactions Regular payments made with your debit card, such as subscriptions or gym membership. These may be considered for Discretionary Overdraft. Card Payment Networks Electronic systems used to process debit card transactions. Depending on the network (e.g., PIN or Mastercard®), transactions may post immediately or take a few days. Automated Clearing House (ACH) A U.S. electronic network that processes large volumes of credit and debit transactions in batches—like direct deposits and automatic bill payments. Pending Transactions Transactions that have been authorized but not yet posted. These reduce your Available Balance but not your Current Balance until they post. Posted Transactions Transactions that have been fully processed and reflected in your Current Balance. Presented Transactions Transactions initiated by a third party (e.g., a merchant) for payment. Once presented, they may be paid or rejected and can appear as pending or posted depending on how they’re processed.

Overdraft Services | First Tech Credit Union

Q: What’s the difference between a returned or rejected item and an overdraft?

A returned or rejected item means the Available Balance in your account is too low to cover a transaction at the time it is presented to us and we did not process it. These transactions, such as checks, debit card point of sale (POS) purchases or automatic payments, are rejected or returned unpaid to the merchant or payee. When this occurs, First Tech does not charge a fee, but the payee or merchant still may. A separate Return ACH Origination Fee may apply if you request First Tech to initiate an ACH transfer to or from an external account and that transfer is unsuccessful or returned. An overdraft occurs when we do authorize and pay a transaction for an account with an insufficient Available Balance. The difference is the third party has been paid

Q: What’s the difference between my Available Balance and Current Balance?

Available Balance is the amount of money currently available to use for transactions. It includes: Pending debit card purchases that have been authorized but not yet posted Holds on deposits, such as checks that haven’t cleared Other account holds, such as authorized transactions, uncollected funds or unavailable funds We use your Available Balance to determine whether to authorize or pay transactions. If it is too low, your transaction may be declined or result in an overdraft. Current Balance is the total amount of money in your account based on transactions that have already posted. It reflects the full value of deposits—even if some of those funds are still on hold. Your Current Balance includes: Posted deposits (even if part is not yet available) Completed withdrawals and payments Posted fees and charges It doesn’t reflect: Pending debit card purchases Scheduled payments Checks written that haven’t cleared Holds on deposits Authorized transactions that haven’t posted To help avoid overdrafts, review your Available Balance before making purchases, withdrawals or payments.

Here's a breakdown of when fees may apply if your account doesn't have enough available funds to cover a transaction:


Check, ACH, POS (Recurring)	Paid	No Overdraft Fee charged
Check, ACH	Rejected or returned	No Overdraft Fee charged
ATM Withdrawals, POS (Everyday)	Rejected or Paid (in limited cases)	No Overdraft Fee charged
Overdraft Protection Transfers (from linked savings or credit line)	Paid	No Overdraft Fee charged. Finance charges may apply for credit line transfers.

Important Notes:

Overdraft Protection transfers occur at the end of our daily processing cycle.
If your linked account doesn’t have enough funds or available credit to cover the overdraft, the transaction may be declined or returned, or we may choose to pay it through Discretionary Overdraft if you are opted-in.
Credit line transfers are subject to finance charges as outlined in your loan agreement.
Merchants and other payees may charge a fee for returned or rejected checks or ACH payments.

A returned or rejected item means the Available Balance in your account is too low to cover a transaction at the time it is presented to us and we did not process it.

These transactions, such as checks, debit card point of sale (POS) purchases or automatic payments, are rejected or returned unpaid to the merchant or payee.

When this occurs, First Tech does not charge a fee, but the payee or merchant still may. A separate Return ACH Origination Fee may apply if you request First Tech to initiate an ACH transfer to or from an external account and that transfer is unsuccessful or returned.

An overdraft occurs when we do authorize and pay a transaction for an account with an insufficient Available Balance. The difference is the third party has been paid

Available Balance is the amount of money currently available to use for transactions. It includes:

Pending debit card purchases that have been authorized but not yet posted
Holds on deposits, such as checks that haven’t cleared
Other account holds, such as authorized transactions, uncollected funds or unavailable funds

We use your Available Balance to determine whether to authorize or pay transactions. If it is too low, your transaction may be declined or result in an overdraft.

Current Balance is the total amount of money in your account based on transactions that have already posted. It reflects the full value of deposits—even if some of those funds are still on hold.

Your Current Balance includes:

Posted deposits (even if part is not yet available)
Completed withdrawals and payments
Posted fees and charges

It doesn’t reflect:

Pending debit card purchases
Scheduled payments
Checks written that haven’t cleared
Holds on deposits
Authorized transactions that haven’t posted

To help avoid overdrafts, review your Available Balance before making purchases, withdrawals or payments.

Once your account has been open for at least 60 days, First Tech may use Discretionary Overdraft to cover certain transactions that would otherwise be declined due to insufficient funds.

This includes:

Checks
ACH payments
Recurring debit card transactions

This does not include:

ATM withdrawals
Everyday POS debit card purchases

Important notes:

We always attempt to use Overdraft Protection before Discretionary Overdraft—if you’re enrolled and funds are available in your linked account(s).
Transactions are paid with Discretionary Overdraft at our discretion and are not guaranteed.
Only accounts with a primary account holder age 18 or older are eligible for Discretionary Overdraft.
For current details on our Overdraft Services, refer to our: Overdraft Policy Disclosure (PDF).

Discretionary Overdraft is a service we offer our members to help you avoid declined transactions and third-party fees.

When deciding whether to cover an overdraft with Discretionary Overdraft, we look at several factors, including:

The amount of the transaction
Your history of regular deposits
The number of past overdraft occurrences
Your overall ability to repay the overdraft

If we cover a transaction using Discretionary Overdraft:

You must repay the overdraft promptly.
You cannot defer payment—you’re responsible for bringing your account back to a positive balance.

Just because a transaction is paid with Discretionary Overdraft in the past does not guarantee every overdraft transaction will be paid in the future. We reserve the right to decline to pay with Discretionary Overdraft at any time.

For more information, refer to our:

Overdraft Policy Disclosure (PDF)

If you prefer not to have transactions covered by our Discretionary Overdraft service, you can opt out at any time.

Opting out helps avoid a negative balance, but it may also mean certain payments are declined or returned if your available balance is too low. That could result in merchant fees or other third-party charges.

You can opt out of Discretionary Overdraft services through the Overdraft Services feature in Digital Banking, by visiting your local branch, or by contacting us.

Overdraft Protection is an optional service that helps you avoid declined transactions by linking an existing share savings account, line of credit or credit card to your checking account.

If your checking account doesn’t have sufficient funds to cover a transaction, Overdraft Protection will automatically transfer money from a linked account to cover the shortfall.

Important details:

There is no fee for an Overdraft Protection transfer from a linked consumer account(s).
Transfers from a linked share savings account are made in $100.00 increments. If your savings account balance is less than $100, we’ll transfer up to the amount available to cover the item(s).
Transfers from a linked line of credit or credit card are made to the nearest $0.01.
Transfers from a line of credit or credit card may be subject to finance charges as outlined in your loan or credit card agreement.

Transfers are only made if you have sufficient funds in the linked account(s) to cover the transaction.

You can set up Overdraft Protection through the Overdraft Services feature in Digital Banking, by visiting your local branch, or by contacting us.

Eligible source accounts include savings, lines of credit or credit card accounts. Lines of credit and credit cards are subject to eligibility and normal credit approval, and the linked source must have common ownership with your checking account.

Yes, you can link multiple source accounts for Overdraft Protection and designate the order the accounts will be drawn from to cover transactions.

For example, you could set Overdraft Protection to transfer money from your linked savings account first. If that account doesn’t have sufficient funds, it could then transfer funds from your linked line of credit account.

You can set up and configure these options through the Overdraft Services feature in Digital Banking, by visiting your local branch, or by contacting us.

Understanding how transactions are processed helps you manage your account balance. Here’s a breakdown of how common payment types affect your Available Balance and Current Balance and what happens if your balance isn’t enough to cover a transaction.

ACH transactions and checks

These are processed in batches and include direct deposits (such as payroll), automatic payments made using your account number (like utility bills or subscriptions) and checks you write.

If your Available Balance is too low when a payment or check is presented, we may transfer funds through Overdraft Protection, pay the item using Discretionary Overdraft, or reject/return it unpaid, which could result in a merchant fee.

ATM withdrawals

ATM withdrawals are deducted immediately from both your Available and Current Balance. If your Available Balance is too low, the transaction will be declined.

Overdraft Protection and Discretionary Overdraft services do not apply to ATM withdrawals.

Point-of-sale (POS) debit card transactions

These include in-store purchases, online shopping and digital debit card purchases. Funds are deducted from your Available Balance immediately. If you don’t have enough funds and Overdraft Protection isn’t active, the transaction will be declined. Discretionary Overdraft does not apply to everyday POS transactions.

Most POS transactions are processed either through a PIN network or the Mastercard® network.

PIN network (such as Star) transactions are submitted for payment immediately. If approved, the payment is deducted from your account, reducing both your Available and Current Balance at the time of the transaction.
Mastercard® network debit card transactions are authorized immediately, reducing your Available Balance. However, it may take several days to post and reduce your Current Balance. While the transaction processes, your account will show as a pending transaction or a hold.

If your Available Balance is insufficient when the transaction is presented for payment and posts, your account will still be debited, which may result in an overdraft if you don’t have Overdraft Protection set up.

Understanding key financial terms can help you manage your account with confidence and avoid unnecessary fees. Here’s a quick guide to some commonly used terms at First Tech:


Point of Sale (POS) Everyday Transactions	Purchases made with your debit card for day-to-day expenses, like making a purchase at a store, restaurant or online. These are typically not eligible for Discretionary Overdraft.
Point of Sale (POS) Recurring Transactions	Regular payments made with your debit card, such as subscriptions or gym membership. These may be considered for Discretionary Overdraft.
Card Payment Networks	Electronic systems used to process debit card transactions. Depending on the network (e.g., PIN or Mastercard®), transactions may post immediately or take a few days.
Automated Clearing House (ACH)	A U.S. electronic network that processes large volumes of credit and debit transactions in batches—like direct deposits and automatic bill payments.
Pending Transactions	Transactions that have been authorized but not yet posted. These reduce your Available Balance but not your Current Balanceuntil they post.
Posted Transactions	Transactions that have been fully processed and reflected in your Current Balance.
Presented Transactions	Transactions initiated by a third party (e.g., a merchant) for payment. Once presented, they may be paid or rejected and can appear as pending or posted depending on how they’re processed.

Overdraft Services FAQs