Overdraft Coverage Options

Life happens!  Desert Schools understands that unexpected overdrafts occur from time to time - overdraft coverage can help.

What are my overdraft coverage options?

The choice is yours. Consider these ways to cover overdrafts:

Service Cost
Link to a deposit account you have at Desert Schools1 $5 fee per transfer
Overdraft Protection Line of Credit1 2 $5 transfer fee + interest
Courtesy Overdraft Coverage (Privilege Pay) $35 overdraft fee

1Contact our Member Assistance Center at 602-433-7000, or come by a branch to sign up or apply for these services.
2Subject to credit approval.

What is overdraft protection?

Overdraft Protection services apply to all types of transactions and may help protect your account from being overdrawn by automatically transferring funds to your checking account from another account or line of credit you may have at Desert Schools for a fee or finance charge. Please note that overdraft lines of credit are subject to credit approval.

What is privilege pay?

Privilege Pay is a courtesy overdraft coverage that allows you to overdraw your account up to the disclosed limit for a fee in order to pay a transaction.

Desert Schools may provide you a specific Privilege Pay limit depending on the type of account you have. You will receive a letter approximately 30 days after account opening, for consumer accounts, or after 60 days, for business accounts, informing you that Privilege Pay has been activated on your account. You do not have Privilege Pay until you receive this notification.

Even if you have Overdraft Protection as described above, Privilege Pay is still available as secondary coverage if the other protection sources are exhausted.

Please be aware that the Privilege Pay amount is not included in your balance provided through online banking, mobile banking, telephone banking or Desert Schools ATMs.

What types of transactions does privilege pay cover?

The types of transactions covered by Privilege Pay depend on the coverage selected. See the chart to the right for more information.

If you choose Full Coverage, all the transaction types listed in Standard Coverage are included, along with ATM withdrawals and every day debit card transactions. Desert Schools will not authorize overdrafts for ATM withdrawals and every day debit card transactions on consumer accounts unless you give us your consent to pay these overdrafts by electing Full Coverage*. Business accounts automatically have Full Coverage*.

Standard Coverage (No action required) Full Coverage (Your consent required*)
Checks X X
ACH - Automatic Debits X X
Recurring Debit Card Payments X X
Online Bill Pay Items X X
Online Banking Transfers X X
Telephone Banking X X
ATM Withdrawals
Everyday Debit Card Purchases

How much does privilege pay cost?

There is no fee for having Privilege Pay unless you use it. The Overdraft fee of $35 per transaction will be imposed for overdrafts created by checks, ACH, point-of-sale, ATM withdrawals, or by other electronic means. If multiple items would overdraw your account on the same day, each item would be assessed the appropriate fee. This is the same fee that Desert Schools charges for items returned to the payee due to insufficient funds.

For consumer accounts, there is a maximum of five (5) Overdraft fees ($175) per processing day that will be charged. Desert Schools will not charge an overdraft fee if a consumer account is overdrawn by $5 or less. These exceptions do not apply to business accounts.

All fees and charges will be included as part of the Privilege Pay limit amount. Your account may become overdrawn in excess of the Privilege Pay limit amount as a result of the assessment of a fee. The total negative balance, including all fees and charges, is due and payable upon demand. All owners of an account will be jointly and severally liable for all such amounts as described in the Statement of Terms, Conditions and Disclosures.

What if I don't want privilege pay?

You can request to discontinue the Privilege Pay service in its entirety at any time by contacting our Member Assistance Center at 602-433-7000. Without Privilege Pay, your insufficient funds items will be returned to the payee and/or declined at the point of purchase, unless you have Overdraft Protection available to cover the item(s). You will be charged the standard NSF fee of $35 for all returned items.

What if I want Desert Schools to pay my ATM and everyday debit card overdrafts (full coverage)?

If you want Desert Schools to authorize and pay overdrafts caused by ATM withdrawals and everyday debit card transactions (Full Coverage), tell Desert Schools by using one of the following methods:

  • Call our Member Assistance Center at 602-433-7000
  • Log into your account through Online Banking at desertschools.org
  • Visit one of our convenient branch locations
  • Complete the Consent Form, which is available at any branch and mail it to Desert Schools at Attn: Member Assistance Center, P.O. Box 2945, Phoenix, AZ 85062-2945.

NOTE: Business accounts automatically have access to Privilege Pay for ATM withdrawals and everyday debit card transactions (Full Coverage).

What else do I need to know?

  • Desert Schools posts items in the following order: 1) Teller transactions and other force post items (low to high dollar amount), 2) Transfers (low to high dollar amount), 3) Recurring Non-PIN Point of Sale (order in which they are received), 4) ATM transactions (order in which they are received), 5) Non-PIN Point of Sale (order in which they are received), 6) PIN Point of Sale (order in which they are received), 7) ACH (low to high dollar amount), 8) Checks (check number order). The order in which transactions are posted may impact the total amount of overdraft or return fees assessed.
  • A single larger overdraft will result in just one fee, as opposed to multiple smaller overdrafts.
  • Although under applicable card network rules, Desert Schools may be obligated to pay some unauthorized debit card transactions, Desert Schools will not authorize debit card or ATM transactions unless there are sufficient available funds (including overdraft coverage) to cover the transactions and the amount of any fee(s).
  • Giving Desert Schools your consent to pay everyday debit card and ATM overdrafts may result in you incurring overdraft fees for transactions that would otherwise be required to pay without assessing an overdraft fee. However, this may allow Desert Schools to authorize transactions up to the amount of your Privilege Pay limit and may also help you avoid overdrafts in excess of your available funds that could result in restriction of your debit card.
  • Except as described in this brochure, Desert Schools will not pay items if your account and other sources do not contain sufficient funds (including the Privilege Pay limit) to cover the item(s) and the amount of any fee(s).
  • Desert Schools may restrict your debit card use if you incur overdrafts in excess of the available funds in your account including any Privilege Pay limit.
  • Desert Schools will place a hold on your account for any authorized debit card transaction until the transaction settles (usually within two business days) or as permitted by card network rules. In some cases, the hold may exceed the amount of the transaction.
  • Privilege Pay is not a line of credit; it is a discretionary overdraft service that can be withdrawn at any time without prior notice.
  • Privilege Pay may be discontinued if you default on any loan or other obligation to Desert Schools, your account becomes subject to any legal or administrative order or levy, or if you fail to maintain your account in good standing by not bringing your account to a positive balance within thirty (30) days of the initial overdraft date, for a minimum of one (1) business day.