What You Need to Know About Overdrafts And Overdraft Fees


When you do not have sufficient funds based on your available balance to cover a transaction, and your bank pays it regardless, it is commonly referred to as an overdraft.  Salem Five covers overdrafts in two different ways:

  1. Standard overdraft practices that come with your account.
  2. Overdraft protection plans, such as a link to a savings account or line of credit, which may be less expensive than our standard overdraft practices. To learn more, ask us about these plans.

What are standard overdraft practices that come with my account?

We do authorize and pay overdrafts for the following types of transactions (fees apply):

  • Checks and other transactions made using your checking account number
  • Automatic bill payments
  • Recurring debit card transactions

We do not authorize and pay overdrafts for the following types of transactions unless you ask us to.  See the below transactions that will be automatically declined and returned in most cases at the payment terminal unless you opt in for this service (fees will not apply on these transactions unless you opt in for this service):

  • ATM transactions
  • Everyday debit card transactions

We pay overdrafts at our discretion, which means it does not guarantee that we will always authorize and pay any type of transaction.  One factor of our overdraft decisioning process that applies for most of our checking accounts and certain savings accounts is a courtesy overdraft limit that can increase or decrease based on the handling of your account regarding overdraft related transactions.  This feature enables our system to initially code transaction items to be paid or returned based on your current limit.  New accounts must be opened for more than 30 days for this feature to be activated.  You should ask us if your account comes with a courtesy overdraft limit.

If we do not authorize and pay an overdraft, your transaction will be declined.

What fees will I be charged if Salem Five pays my overdraft?

Under our standard overdraft practices:

  • We will charge a fee of $35.00 ($5.00 fee for 18/65 accounts) each time an overdraft item is paid at our discretion. Insufficient funds (NSF) fees for transaction items paid at our discretion will be limited to five (5) fees per day that can be charged to your account. We will not charge a fee to your deposit account when we decline or return an item unpaid due to insufficient or uncollected funds, but you may be charged a fee by the payee for the returned payment. As a courtesy, should a transaction overdraw your account in the amount of $5.00 or less, your account will not be charged.

What if I want Salem Five to authorize and pay overdrafts on my ATM and everyday debit card transactions?

If you also want us to authorize and pay overdrafts on ATM and everyday debit card transactions on your account, it’s simple – choose one of following ways to let us know that you wish to opt in for this overdraft service.

  1. Visit a Salem Five locations and inform one of our representative
  2. Call (800) 850-5000

If you would like information about Overdraft Protection Plans, please speak with a representative at one of our branch locations, or call us at (800) 850-5000.