Overdraft Protection

Choose Protection

At RBC Bank, we’re committed to delivering proactive service, straight-forward banking solutions and practical advice to help you create a path toward financial success and security. Overdraft protection is an important part of that path, and we want to make sure you’re aware of all choices available to you and fully understand how each may affect your everyday banking activity.

Create Peace of Mind

Choosing the right solution to protect against the embarrassment of declined card transactions and returned checks, not to mention the frustration of paying costly overdraft fees, is a smart way to create financial peace of mind. RBC Bank offers several different options to fulfill your needs and fit your budget. Find out which overdraft solution works best for you!

Standard Overdraft Coverage

RBC Bank provides standard overdraft coverage to personal checking account owners. This service may authorize check, automatic bill payment, one-time check card and ATM card transactions, and other transactions using your checking account number even if there isn’t enough money in your checking account to pay for them. While there is no fee to have this option attached to your checking account, you will pay fees for overdraft transactions. There are many important factors to consider should you choose standard overdraft coverage as your primary protection tool:

It’s discretionary.

RBC Bank pays overdrafts at our discretion. There is no guarantee that your overdraft transactions will be paid.

Fees can add up quickly.

In the event that RBC Bank pays your overdraft transactions, you will be charged a fee for each item paid. While per-item fees vary, multiple transaction overdrafts can cost you more than $100.

You must actively enroll.

Federal banking regulations now require consumers to actively enroll or “opt in” to standard overdraft coverage, specifically for one-time check card and ATM card transactions. If you do not opt in to the service, all one-time check card and ATM card transactions will be declined if you do not have sufficient funds in your checking account to cover them. The opt-in process does not affect checks, automatic bill payments or other transactions using your checking account number. You will still receive standard overdraft coverage for these types of transactions.

Overdraft Protection Solutions

RBC Bank overdraft protection solutions offer a proactive way to ensure your purchase and payment transactions are covered if the balance in your checking account falls short. However, you may incur a fee for transferring funds from your overdraft protection solution to your checking account. Depending on the type of checking account you wish to protect, you can select one of the following options to do the job.

Personal Lines of Credit¹

You can link a personal line of credit to any personal RBC Bank checking account. In the event a transaction or series of transactions causes you to overdraw, predetermined dollar increments will transfer automatically from the line of credit to your checking account to cover it. While personal lines of credit offer convenient access to funds, flexible repayment options and revolving credit, be sure to consider the following:

It’s a loan. You’ll need to complete a credit application and be approved. If you use any of the funds, you will be required to repay the balance owed – along with interest.
You’re only covered up to your available credit limit. If you have $400 available on your line of credit and you have overdraft transactions on your checking account totaling $500, the remaining $100 may be subject to NSF fees if the item is returned for insufficient funds, or alternatively may be subject to overdraft fees if the item is paid. Therefore it is very important to always track how much remaining credit is available on your line of credit.

Savings or Checking Accounts

If you are an RBC Bank Select or Preferred Checking Account owner and you also have a personal savings, money market savings, or other checking account with the bank you can link the two accounts and create a smart, debt-free way to transfer your own money to cover overdrafts. However, you may want to consider:

Your money is finite. Don’t ignore your monthly budget just because you’ve got funds in other accounts to cover balance shortfalls. Overspending or living beyond your means can quickly deplete savings or other cash on hand.

Home Equity Lines of Credit¹

RBC Bank Home Equity Lines generally offer lower variable interest rates than many other types of credit. Home Equity Lines provide flexible repayment terms on outstanding balances when the line of credit is used, as well as fixed-rate payment options, making them a savvy borrowing option for home owners – even for overdrafts. Home Equity Lines require completion and approval of a credit application. Predetermined dollar increments will transfer automatically from the Home Equity Line to your checking account to cover overdrafts. Just remember a few key points:

Don’t overspend. Home Equity Lines typically have higher credit limits than credit cards or other personal loans. Knowing this money is available through your checking account can create a temptation to spend more than you can afford. Credit-based overdraft protection is a great option as long as it’s well managed.
Overdraft expenses may not be tax deductible. Many consumers believe that just because they have a Home Equity Line of Credit, all interest paid is tax deductible. Not so. Typically, tax deductions are only available for interest paid against balances used for home improvement or other qualifying purchases. Be sure to consult with your tax advisor.

¹ All loans subject to credit approval. There may be an annual fee associated with these products.

Frequently asked questions about changes coming August 15th, 2010 for accounts opened before July 1, 2010

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What is standard overdraft coverage, and how is it different from overdraft protection?

Standard overdraft coverage is a service provided by banks, including RBC Bank, which authorizes one-time debit card (check card) and ATM card transactions for clients even if there isn’t enough money in the checking account to cover the transaction. For providing this service, a fee is charged for each overdraft transaction. RBC Bank pays overdrafts at our discretion, and there is no guarantee an overdraft transaction will be paid.

Overdraft protection is a service that allows a client to link an RBC Bank checking account to another RBC Bank checking account, savings account, money market account or line of credit to cover overdrafts that may occur.

What is changing with overdraft coverage?

An important federal banking regulatory change goes into effect on August 15, 2010, that will impact one-time debit card and ATM card transactions. Every bank is impacted by this regulatory change. In order for you to continue receiving the benefit of standard overdraft coverage, you will be required to actively “opt in” and agree to the terms and conditions of the standard overdraft coverage service.

For more details, please visit the Federal Reserve Web site at www.federalreserve.gov/newsevents/press/bcreg/2009bcreg.htm .

Does the regulatory change apply to all types of checking account transactions?

No, automatic bill payments, checks and other transactions using your checking account number are not impacted by the regulatory change. Only ATM card and one-time debit card transactions, both PIN and signature-based, are affected.

Does the regulatory change apply to business accounts?

Business checking accounts are not affected by the regulation and will continue to have standard overdraft coverage with fees.

What will happen if I “opt in” and choose to continue standard overdraft coverage?

If you opt in by 5:00 p.m. EDT on August 12, 2010, standard overdraft coverage will continue without disruption. This means that RBC Bank will continue to cover, at our discretion, one-time debit card and ATM card transactions even if there isn’t enough money in your account to cover the purchase.

If you miss the deadline but still wish to opt in, it’s not too late. After August 12, 2010, you may opt in to standard overdraft coverage at any time by calling 1-800-236-8872 to speak with an RBC Bank representative or visiting your local banking center.

What will happen if I “opt out” and do not choose standard overdraft coverage?

If you choose to opt out of standard overdraft coverage, then beginning August 15, 2010, your one-time debit card and ATM card transactions will no longer be covered and will be declined if you do not have enough money in your account to cover the transaction, unless you have overdraft protection. Overdraft protection is a service that allows a client to link an RBC Bank checking account to another RBC Bank checking account, savings account, money market account or line of credit to cover overdrafts that may occur. To learn more about overdraft protection solutions , please contact us at 1-800-236-8872 or visit your local banking center.

What are the fees for standard overdraft coverage?

There is no fee for opting in to the standard overdraft coverage service. However, if you choose to continue having standard overdraft coverage, RBC Bank will charge you a fee of up to $41 each time we pay an overdraft. There is no limit on the number of overdrafts for which we may charge such fees if you overdraw your account. Please refer to our Service Agreement and Schedule of Fees for details.

How does RBC Bank assess which overdrafts are paid?

RBC Bank pays overdrafts at our discretion, which means there is no guarantee an overdraft transaction will be paid, even if you opt in to standard overdraft coverage. RBC Bank determines whether or not to pay an overdraft transaction based on the account behavior and the transaction being presented.

Do I have to decide today? What if I change my mind?

You have until 5:00 p.m. EDT on August 12, 2010 to let RBC Bank know you wish to opt in to continue standard overdraft coverage without disruption. But the sooner you make your decision, the sooner you will have the peace of mind of knowing that your coverage will continue without any interruption.

If you change your mind before or after August 12, 2010, you may opt in or opt out of standard overdraft coverage at any time by completing visiting your local banking center or calling 1-800-236-8872 to speak with an RBC Bank representative.

What if I miss the deadline or do not respond at all?

If you do not respond or miss the deadline, you will no longer have standard overdraft coverage. Beginning August 15, 2010, we will automatically decline all ATM card and one-time debit card transactions that would overdraw your account, unless you have overdraft protection.

How do I “opt in” and give RBC Bank permission to continue standard overdraft coverage?

If you received a mailing from us, you may opt in by 5:00 p.m. EDT on August 12, 2010, to continue receiving standard overdraft coverage on one-time debit card and ATM card transactions using one of the options detailed in the letter. These options include: (1) visiting a personalized Web address, where you may complete and submit an electronic overdraft consent election form, (2) providing your election over the telephone by calling 1-866-274-3736, or (3) completing the Standard Overdraft Coverage Selection Form included with the letter and mailing it back in the provided postage-paid envelope.

If you change your mind before or after August 12, 2010, you may opt in or opt out of standard overdraft coverage at any time by completing the online form, visiting your local banking center or calling 1-800-236-8872 to speak with an RBC Bank representative.

If you did not receive a mailing, you may opt in to continue standard overdraft coverage on one-time debit card and ATM card transactions by calling 1-800-236-8872 to speak with an RBC Bank representative or visiting your local banking center.

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