Overdraft Protection

For peace of mind, you may choose to protect your account with one of the Overdraft Protection options listed below, or you may decide none of these are needed — your decision.

  1. Overdraft Transfer from a Companion Account: 
    A companion account may be linked to your checking account to cover overdrafts by transferring funds from another Security Federal Bank account.  A $5.00 fee is charged per transfer, with a limit of six transfers per month if the Companion Account is a savings or Money Market account.

  2. Line of Credit: 
    Qualified applicants may link an unsecured Line of Credit as overdraft protection. Credit terms & conditions apply.

  3. Overdraft Reserve®:
    As a courtesy to accountholders in good standing, the Bank may honor overdrafts on an account, instead of automatically returning items as unpaid.  This non-contractual overdraft service is called Overdraft Reserve®. The maximum account protection limits associated with Overdraft Reserve are as follows:

    Personal Checking:  $500 (to cover overdrafts and fees)
    Small Business:  $1,500 (to cover overdrafts and fees).
Overdraft Reserve® Activation: 
Several types of transactions may contribute to an account being overdrawn.  Examples include: a) the payment of checks, electronic funds transfers, or other withdrawal requests; b) the return of unpaid items deposited by you; c) the assessment of bank service charges; or d) the deposit of items which, according to the bank's Funds Availability Disclosure, are treated as not yet available or finally paid.  The Bank is not obligated to honor any item presented for payment if the account being drafted contains insufficient funds or is not linked to a Companion Account or Line of Credit with sufficient funds to cover the item.  However, if the Bank pays one or more overdraft items, as a courtesy, the accountholder (s) will be notified by mail (or email if the accountholder is signed up for e-Statements and/or electronic delivery of notices).  Notification will include a list of overdraft items for which reimbursement is due, along with any fees owed for the service.  The order in which transactions are received and processed can affect the total amount of overdraft fees incurred. Checks received from other customers or other financial institutions are paid daily in check number sequence when the check number is provided.

Overdraft Reserve Fees: 
If the total balance of an account is negative by more than $10.00, an overdraft fee of $35.00 will be assessed for each overdraft item paid by the Bank, up to a maximum of three overdraft charges per day on consumer accounts.  Covered items and associated overdraft charges are due and payable upon demand, as are any fees associated with returned items.  If an account is overdrawn for more than 10 consecutive business days, a fee of $5.00 will be charged for each business day the account is overdrawn. Overdraft fees and continuous overdraft charges will be deducted from the account’s protection limit along with the amount of any overdraft items paid. If there is more than one account owner on the signature card, each owner, and agent if applicable, shall be jointly and severally liable for any overdraft items paid along with associated fees.

Overdraft Reserve Access:  
Overdraft Reserve funds may be accessed through a teller, ACH, check or automatic payment up to the maximum protection limit.  Overdraft Reserve® may also be accessed through an ATM or debit card purchase, but for personal checking accounts, this is only possible if the accountholder opts-in on the “What You Need to Know About Overdrafts and Overdraft Fees" disclosure. 

Overdraft Reserve Limitations: 
Security Federal Bank reserves the right to limit participation in Overdraft Reserve to one account per customer and to discontinue Overdraft Reserve at any time without prior notice.  Overdraft Reserve is only available to accounts in good standing.  Good standing means: a) you are not in default on any loan obligation to Security Federal Bank; b) you bring your account to a positive balance (not overdrawn) at least once every ten (10) consecutive business days; c) your account is not the subject of any legal or administrative order or levy; and d) your account has not exceeded the Overdraft Reserve limit for your account type (disclosed above). We may refuse to pay an overdraft at any time, even though we may have previously paid overdrafts on the same account or for the same accountholder.  Normally, we will not approve use of Overdraft Reserve to cover insufficient funds or account fees in excess of the limit for the account type.

Avoiding Overdrafts:  
Overdraft Reserve should not be viewed as encouragement to overdraw an account. We encourage account holders to manage finances responsibly. 
In the event you would like to have Overdraft Reserve or any other options removed from your account, please call 803.641.3000.

Account openings and credit are subject to bank approval.