What is Overdraft Protection?

Overdraft Protection is a feature that allows eligible checking account holders to cover transactions that exceed their available balance. When your account balance is insufficient, the service steps in to fund the transaction from a pre-authorized source—so purchases, ATM withdrawals, automated bill payments, and checks can be completed without disruption.

How Overdraft Protection Works

When a transaction would overdraw your account, Columbia Bank's Overdraft Protection automatically transfers funds from an approved linked account or line of credit to cover the shortfall. Common linked sources include:

• A designated savings account owned by the same customer
• A secondary Columbia Bank checking account
• A pre-established overdraft line of credit or personal line of credit

Transfers occur in real time or in daily batch processing depending on the transaction type and timing. The amount transferred typically covers the overdrawn amount plus, when applicable, a small buffer to reduce the likelihood of immediate additional overdrafts.

Types of Coverage

Columbia Bank offers multiple approaches to overdraft coverage so customers can choose the option that best matches their financial habits:

• Linked Account Transfers: Automatic transfers from a designated savings or secondary checking account. This option helps avoid overdraft fees by using your own funds.
• Overdraft Line of Credit: A preapproved line that covers overdrafts up to a set limit. Interest may apply to the borrowed amount, and terms are disclosed at enrollment.
• Courtesy Overdraft Policy: In certain cases, Columbia Bank may allow transactions to clear even without a linked source, subject to discretionary fee policies and account history.

Benefits of Enrolling

• Continuous Access: Pay for everyday purchases, bills, and withdrawals even when your balance is unexpectedly low.
• Reduced Returned Item Risk: Avoid returned checks and the penalties or inconvenience that can accompany them.
• Customized Control: Select the protection method that aligns with your financial priorities—use your savings first or rely on a line of credit.
• Peace of Mind: Minimize stress and disruption from accidental overdrafts with automatic protection in place.

Fees and Costs

Columbia Bank is transparent about fees associated with overdraft options. Costs vary by the type of protection you choose:

• Transfers from a linked savings or checking account may carry a nominal transfer fee per occurrence or no fee, depending on account terms.
• An overdraft line of credit generally incurs interest on the outstanding balance and may include an annual or setup fee as agreed at the time of underwriting.
• Discretionary courtesy overdrafts may be subject to an overdraft fee per item. Fee amounts and daily limits are disclosed in account terms and fee schedules.

Customers are encouraged to review the account disclosures provided by Columbia Bank for full details on applicable fees and how they are applied.

Eligibility and Enrollment

Enrollment requirements depend on the type of overdraft protection selected:

• Linked accounts: Must be owned by the same primary account holder or joint account owners. Enrollment can be completed at a branch or through account management tools.
• Overdraft lines of credit: Require a credit application and approval process, including credit checks and underwriting, to determine eligibility and limits.
• Courtesy overdraft: May be applied at the bank’s discretion to accounts in good standing. Specific conditions and qualifications apply.

Enrollment can often be managed online, through mobile banking, by phone, or in person at a Columbia Bank branch. Account holders should verify documentation and authorization requirements prior to enrollment.

Managing and Monitoring

Effective overdraft protection relies on active account management. Columbia Bank provides several tools to help customers monitor balances and control overdraft usage:

• Real-time balance alerts via mobile app or SMS
• Account activity notifications for low balances, deposits, and transactions
• Online statements and transaction history for tracking overdraft occurrences and fees

Setting alerts and frequently reviewing statements can minimize reliance on overdraft protection and help customers plan ahead.

Examples and Scenarios

Example 1: A customer with $25 in their checking account makes a $60 purchase. If they have a linked savings account with sufficient funds, Columbia Bank automatically transfers the $35 needed to complete the purchase, often avoiding a declined transaction or returned item.

Example 2: A customer with an approved overdraft line of credit is automatically advanced the shortfall amount when a large bill posts unexpectedly. Interest accrues on the borrowed amount according to the line’s terms until it is repaid.

Alternatives and Best Practices

While overdraft protection is a valuable safety net, consider these complementary strategies:

• Keep a small buffer in your primary checking account to reduce reliance on overdrafts.
• Use automatic transfers to replenish checking from savings on a regular schedule.
• Set up low-balance alerts and review recurring payments to prevent surprises.

Combining proactive money management with an appropriate overdraft option can reduce fees and protect your financial reputation.

Security and Consumer Protections

Columbia Bank adheres to regulatory and industry standards to protect your account information and ensure transparent overdraft practices. Account disclosures, clear fee schedules, and options to opt in or out of certain overdraft services are provided to help you make informed decisions.