An overdraft happens when a transaction is for more than the available balance in your checking account. Overdraft protection links a backup source — such as an RMO savings account or line of credit — to automatically cover the shortfall.
What happens without overdraft protection: when a transaction would overdraw your account, RMO may either pay the item and create an overdraft, or return it unpaid (a non-sufficient funds, or NSF, item). Either outcome can come with a fee.
Debit card and ATM transactions: federal rules require you to opt in before RMO can cover overdrafts on everyday debit card and ATM transactions. You choose your preference in MyRMO and can change it at any time. If you do not opt in, those transactions are simply declined when funds are short — with no overdraft fee.
Ways to avoid overdraft fees:
- Link overdraft protection from an RMO savings account or line of credit.
- Set up low-balance alerts in MyRMO.
- Watch pending transactions, which reduce your available balance before they post.
- Keep a small cushion in your account.
Fees: RMO discloses overdraft, returned-item, and overdraft-protection transfer fees in its fee schedule — review it in MyRMO or at an RMO Retail Center before you rely on overdraft coverage.