Wed Jan 19 2022 18:45:00 GMT+0000
- What is overdraft protection?
- What are the advantages of overdraft protection?
- How does overdraft protection work?
- Which overdraft protection plan is right for me?
- How can I apply for overdraft protection?
- How can I switch Overdraft Protection plans?
- How to avoid non-sufficient fund fees?
- How to close an overdraft account?
Life happens. Perhaps you overestimated how much you had left in your bank account or just miscalculated your budget for the month. If your bank account did not have sufficient funds to cover your transactions, additional fees can be expensive. Setting up overdraft protection on your account can help you better manage your finances.
Here's everything you need to know about setting up overdraft protection on your bank account.
Overdraft protection is an optional, short-term solution that can help you manage your finances. If you’re ever short on money in your bank account, it can help you complete your transactions by temporarily covering your payments.
Having overdraft protection has a lot of great benefits. Some of the top advantages of overdraft protection:
- Honours all kinds of transactions up to your approved overdraft limit
- Can prevent Non-Sufficient Funds (NSF) charges
- Provides protection with overdraft limits from $250 to $5,000
Overdraft protection is set up differently by different financial institutions. At Scotiabank, overdraft protection comes in two different options so you can choose the best one for your needs. If anything changes, you can always switch your plan at any time.
1. Monthly Overdraft Protection Plan: $5 per month
For one low monthly fee, you can protect yourself from overage charges no matter how many times you use it as long as the overdrawn balance is within the overdraft limit. Interest is also payable on overdrawn balances, calculated daily at 21% (per annum), charged monthly.
2. Pay-per-use Overdraft Protection Plan (not available in Quebec): $5 per use
Under this plan, you will be ready for any unexpected expenses and will only pay the fee when you use it. The $5 per-use Overdraft Protection fee is applied on the same day or within two business days every time an overdraft is created or increased in your account. As well, interest is also payable on overdrawn balances, calculated daily at 21% (per annum), charged monthly. There is no Per-use Overdraft Protection fee if you do not use the overdraft.
Note: Customers who are Ultimate Package Account holders and add overdraft protection to their account will have the overdraft protection fee(s) automatically waived.
When deciding which overdraft protection plan to choose, consider how often your account goes into overdraft. For Scotiabank customers deciding between the two different overdraft options, here is what to keep in mind. If you just need a safety net for occasionally going into overdraft, the Pay-per-use Overdraft Protection Plan will help you avoid multiple fees in the long run. Even if you have less than one overdraft a year, the Pay-per-use Overdraft Protection plan will avoid the stress and fees associated with bounced cheques, overdrawn accounts or declined debit card transactions.
If you find yourself frequently going into overdraft, the Monthly Overdraft Protection Plan may be the better option for you. With this plan, you’ll only be charged $5 per month, regardless of the number of overdraft transactions, as long as the overdrawn balance is within the overdraft limit.
You can apply for overdraft protection at Scotiabank through online banking or the mobile app.
To get started from your web browser:
- Sign in to your account and select Products and Services from your Accounts page.
- From the dropdown menu, select Lines of Credit & Loans
- You’ll find Overdraft Protection - select Apply Now and follow the instructions
To get started with the app:
- Sign in and select Add a New Product from the app’s Home screen
- From the dropdown menu, select Lines of Credit & Loans
- You’ll find Overdraft Protection - select Apply Now and follow the instructions
You can also apply for overdraft protection by calling our Contact Centre or visiting a branch.
Want to know more about the benefits of Scotiabank's overdraft protection plans?
Learn more and applylearn more about Scotiabank overdraft protection.
Get in touch with your bank to find out how you can switch to the plan that is right for you. At Scotia, you can change your plan any time by contacting Scotiabank’s customer care centre, visiting a branch, or logging into your Scotia OnLine account.
Joint account holders do not have the ability to switch their plan online and would have to contact a branch or call our contact centre.
To get started from your web browser:
- Sign in to your account, select Account Details and view your Overdraft Protection
- Select Add or Modify Overdraft Protection and choose the requested plan before continuing
- Fill out the missing information if needed, tick the checkbox ‘I agree to the terms and conditions above and consent to receive disclosure related to Overdraft Protection Plan electronically’ and select Confirm
To get started with the app:
- Sign in to your account, select Account Details and Manage
- Proceed to Overdraft Protection under Settings, and select Change Plan
- Fill out the missing information if needed, then choose the requested plan. Tick the checkbox ‘I agree to the terms and conditions above and consent to receive disclosure related to Overdraft Protection Plan electronically’ and select Confirm
Along with setting up overdraft protection, there are several ways to protect your finances from non-sufficient fund fees. Keep these tips in mind if you want to keep your banking account in the clear:
- Stay on top of your budget: Knowing how much money you will have left after paying the bills each month will help you to manage your budget better.
- Set up direct deposits: Get your paycheque straight to your account by setting up direct payments with your employer. This can help you have access to your funds faster for recurring bills.
- Set up automatic bill payments: For your regular bills, schedule automatic bill payments in correlation to your payday so you can always have funds to pay the necessities.
- Set up alerts: Sign up for alerts on your account activity and account balance to stay on top of your spending.
If you have an overdrawn account and want to close it, reach out to your bank. If you are a Scotia customer, connect with any Scotiabank branch or call the contact centre at 1-800-472-6842. Keep in mind you will need to pay any outstanding overdraft balance on the account before you can close it.
Ready to get your finances on track for your future? Come in and speak to a Scotia advisor today
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Legal Disclaimer: This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. References to any third party product or service, opinion or statement, or the use of any trade, firm or corporation name does not constitute endorsem*nt, recommendation, or approval by The Bank of Nova Scotia of any of the products, services or opinions of the third party. All third party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circ*mstances are considered properly and action is taken based on the latest available information.
With a background in financial services and banking, I've navigated various aspects of managing accounts, including overdraft protection. I've helped clients understand the nuances and benefits of these features while ensuring they align with their financial goals. Let's break down the key concepts in the provided article.
1. Overdraft Protection: It's a safety net allowing transactions to go through even when an account lacks sufficient funds. This prevents Non-Sufficient Fund (NSF) fees.
2. Advantages: Overdraft protection honors transactions up to the approved overdraft limit, preventing NSF charges and providing financial security.
3. Working Mechanism: Banks like Scotiabank offer different plans:
- Monthly Overdraft Protection Plan: Charges a fixed monthly fee and interest on overdrawn balances.
- Pay-per-use Overdraft Protection Plan: Charges a fee per use without a fixed monthly cost. Interest applies to overdrawn amounts.
4. Choosing the Right Plan: Deciding between plans involves considering your overdraft frequency. The pay-per-use plan suits occasional overdrafts, while the monthly plan is better for frequent overdraft occurrences.
5. Applying for Overdraft Protection: At Scotiabank, one can apply through online banking, the mobile app, by calling the Contact Centre, or visiting a branch.
6. Switching Plans: Contact the bank via customer care, branch visit, or online (for individual account holders) to switch plans.
7. Avoiding Non-Sufficient Fund Fees: Strategies include budget management, direct deposits for faster access to funds, automatic bill payments aligned with paydays, and setting up alerts for account activity and balances.
8. Closing an Overdraft Account: To close an overdrawn account, contact the bank, such as Scotiabank, and settle any outstanding overdraft balance before closure.
This comprehensive overview should help anyone understand, evaluate, and manage overdraft protection effectively. It's a crucial tool in maintaining financial stability, especially during unexpected financial hiccups.
