Pros and Cons of Overdraft Privilege

Pros and Cons of Overdraft Privilege

Whether it’s a mistake balancing your checkbook or an unexpected expense, an overdraft incident happens to almost everyone. Most banks have overdraft services designed to cover you in the event you do not have enough funds in your account. There are mixed views on overdraft privilege services. Let us help clarify.

The pros of overdraft privilege:

  • You only pay for the service if you use it. That is, you pay no upfront or monthly fee to have access to overdraft funds.
  • Offers protection when you need it. In a pinch, the extra funds that overdraft privilege gives can protect against merchant returned check fees or the frustration of having a debit card transaction declined if you have opted in for coverage for ATM and everyday debit card transactions. 

The cons of overdraft privilege:

  • There is a fee when you use the service. While there is no charge to have the service attached to your account, when you spend beyond your available balance and use overdraft privilege funds there is a per-item fee. The fee is designed to discourage overuse of the service and compensate the bank for the risk incurred. You may want to consider an alternative to overdraft privilege.
  • Overuse can be expensive. If you use it frequently, it can be a costly way of making ends meet. You should reassess your financial situation or look into other options.
  • You may not know when to stop. If you do not monitor your account closely, you may continue to spend and incur fees. We recommend our clients set balance alerts to help them stay on top of their finances.

Consumer accounts are charged an overdraft paid item fee of $30 each time Pinnacle pays an overdraft item that causes your account to be overdrawn by more than $15; however, no more than three (3) overdraft paid items fees will be charged per day regardless of the number of items presented for payment, for a maximum charge of $90 per day.

The bottom line is that you should explore all the options available to you before deciding whether overdraft privilege is right for you. Start here to see what else is available. For an overview of Pinnacle's overdraft services and how they have changed, visit

Questions? Simply contact any Pinnacle office or our Client Service Center at 1.800.264.3613.

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