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Overdraft Protection and Services

Safeguard your checking account the way that works best for you with our tools, tips, and optional coverage choices.

Peace of mind designed around the way you bank

In a fast-paced world, even the most organized person can find themselves facing a transaction that is declined or an unexpected withdrawal that puts their account out of balance.1 At Flagstar, we understand that life gets hectic sometimes, so this page features the information you need to control what happens next.

First, let’s talk about preventing overdraft and NSF transactions entirely

Tips for keeping your balance above $0:

  • Track your withdrawals and deposits 24/7/365 with online and mobile banking.2
  • Set up notifications and alerts in online or mobile banking to keep up with deposits, withdrawals, and whatever information is important to you.
  • Pay special attention to delayed charges like gas, hotels, restaurant tips, and rental cars. It often takes a few days for the final amount to go through.
  • Transfer funds or make a qualifying deposit before 4 p.m. ET the next day at an ATM or branch to prevent NSF transactions.3

Understanding the difference between overdraft and NSF transactions

If a transaction reaches your checking account but there aren’t enough available funds to cover it, what happens? The item can be returned unpaid as a non-sufficient funds (NSF) transaction or paid as an overdraft transaction.1 Here’s how it works:

  • Non-sufficient funds (NSF) transaction – Flagstar declines the transaction and does not pay it, so it's returned unpaid. We will not charge an NSF fee, but the person or business you were trying to pay may charge a late fee or returned payment fee.
  • Overdraft transaction – The transaction goes through, and the item is paid. 

You can add overdraft protection to your account—or not

You can protect your Flagstar checking account with any or all of the options below. Not sure what to choose? Our experienced bankers are always happy to help.


You can skip overdraft protection and monitor your account yourself using online, mobile, and telephone banking. You can transfer funds via online, mobile, or telephone banking; stop by a Flagstar branch; or make a qualifying deposit via ATM or mobile banking before 4 p.m. ET the next business day to prevent returned transactions.3

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Track recent and pending deposits.

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Set up notifications and alerts.

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View Instant Balance from your mobile app login screen.

Linked Flagstar accounts4

You can link your checking account to a Flagstar savings, money market, or checking account. If your checking account doesn’t have enough funds to cover a transaction presented for payment, we’ll automatically move funds from the linked account to make up the difference.

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The transaction goes through (if the linked account can cover it).

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You’ll pay no fees assuming the linked account can cover the transaction. (Whew!)

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It’s convenient, but your linked account could earn less interest.

Overdraft line of credit (ODLOC)5

You can apply for a line of credit made specifically for overdrafts. If approved, your ODLOC will kick in if your account doesn’t have enough funds to cover a transaction.

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The transaction goes through (up to your credit limit).

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You’ll pay no fees if the ODLOC can cover the transaction. (Whew!)

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However, you will pay interest on the ODLOC.

You can also layer different types of overdraft protection

For the ultimate coverage, you can add both overdraft protection services to your account. Simply tell us whether to use your linked account(s) or overdraft line of credit first in the event of an overdraft.6 

Which option should be first? The answer depends on your spending habits and the amount of money in your linked account. For example, if your linked account has a large balance, consider putting it first to avoid paying interest on your overdraft line of credit. On the other hand, if you are still building a nest egg, you may want the overdraft line of credit to be first. Still not sure? Our experienced bankers can help you decide what’s right for you.

Compare overdraft protection services for personal checking

  Linked Account(s) Overdraft Line of Credit
How much overdraft protection does this option provide?

Up to the total available balance of the linked account(s) $500 - $10,000 based on credit approval
How much does it cost to cover an overdraft? $0 Interest begins to accrue immediately.
When can I add this option to a new account? Immediately 0-10 days after account opening5
If I sign up for both services, in what order will they cover an overdraft? You can make this option 1st or 2nd.

You can make this option 1st or 2nd.

1Your account is overdrawn when your Available Balance is less than zero. If we pay an Item which exceeds your Available Balance, the transaction will be considered an overdraft transaction, and your account will be considered overdrawn. If an Item exceeding your Available Balance is presented for payment and we return the Item unpaid, the transaction would be considered a non-sufficient funds transaction.

2Not all devices supported. Available for eligible personal and business deposit account customers only.

3To be a qualifying overdraft deposit, the deposit must be: (1) of funds with same-day availability under our funds availability disclosure; (2) in an amount set forth in the next paragraph; (3) made to the overdrawn account; and (4) if the deposit will include cash or check, made at any of our branches up to the daily closing time of the branch on that business day, or at a full-service ATM located on the premises of one of our branches by 4 p.m. ET the next business day. A full-service ATM is an ATM that accepts deposits in addition to dispensing cash. If items exceeding your available balance were paid, the qualifying overdraft deposit must be in an amount that, when all debits and credits to your account for that business day have been posted, results in your available balance being at least $0. A deposit made after 4 p.m. ET on the next business day or made on a day that is not a business day is deemed to be made on the following business day.

4Linked account means another account on which you are an owner, such as a savings, money market, or checking account, which you requested we link to your checking account for overdraft protection purposes. If your linked account earns interest, you should decide whether the amount of overdraft charges on your checking account you anticipate you will avoid under the linked account arrangement will be greater than the amount of interest you will forgo by having funds transferred from the linked account. You may request our Truth-in-Savings Disclosures for the type of account you propose to use as a linked account. It offers information regarding how interest is determined on the linked account and any minimum balance or other requirements to earn interest on the linked account.

5Overdraft line of credit: Credit approval and income verification required. Annual percentage rate (APR) for an overdraft line of credit (ODLOC) is 18%. ODLOC amount varies by your credit score and other factors. Customers with a Flagstar Bank account relationship of 60 days or less are only eligible for up to $3,000. See your current consumer overdraft line of credit account disclosure agreement for details and more information about the interest rate. Borrower must reside in the states of CA,IN, MI or WI.

6You may instruct us whether you want us to transfer from any Linked Account(s) or overdraft line of credit in a certain order. Otherwise, we will transfer from a Linked Account or overdraft line of credit in the order it was associated with your account.

This information is subject to change. See the complete Disclosure Guide for further information.