Overdraft protection good for consumers

Northwestern Financial Review, Jul 1-Jul 14, 2003

Overdraft protection saves consumers money, according to a Consumer Action survey. The non-profit group looked at 26 national and regional banks, and found that all but one offered overdraft protection. To gauge the potential savings of overdraft protection, Consumer Action compared plans to find out what the cost would be if at one time during the course of a year a customer bounced three checks totaling $125.

In these examples, all advances were paid back along with any interest after seven days. Using an overdraft protection line of credit, savings ranged from $89 to $31. Using overdraft protection linked to a savings account, the study showed savings ranged from $37 to $100.