Confused about Self Funded overdraft protection.
Summary:
- The user is confused about the $250 minimum transfer requirement while setting up their Cash Management Account (CMA) and how it affects overdraft situations.
- If the user selects “Free Self-Funded Overdraft Protection,” the CMA will only draw enough funds from the funding account to cover the shortfall, without a minimum transfer requirement.
- If the user opts for “Minimum Target Balance,” the system will automatically transfer a minimum of $250 nightly to maintain the specified balance in the CMA.
- The user has the flexibility to choose the level of protection they want for their accounts.
Here’s the full thread
Currently have a Brokerage that is setup to fund my CMA, I see this $250 minimum mentioned while setting it up. Does this mean the minimum transfer that has to happen is 250? It doesn’t fund as I need it? Like if i spend $10 somewhere with a zero balance in CMA. It will not just send over $10 from the brokerage connected?
Hi! Thanks for reaching out! I’m happy to help clear this up with you.
The amount drawn from your funding account(s) will depend on how you initially set up your Cash Manager.
If you only choose “Free Self-Funded Overdraft Protection,” if overdraft protection kicks in, the Cash Manager will draw only enough available funds from your funding account(s) to your Cash Management Account (CMA) to cover the shortfall. This includes ATM withdrawals and debits from external accounts.
If you also choose to include “Minimum Target Balance Link your investment account(s) to maintain your balance automatically,” that’s where the $250 minimum transfer amount comes into play. If you want to maintain a specific amount at all times, the system will automatically draw funds from the funding account(s) nightly. You can choose your minimum target balance, but the minimum transfer amount is $250.
The protection you wish to include for your accounts is all up to you, so you can have as much or as little as you want.
Feel free to check out our Cash Manager FAQ to learn more: https://www.fidelity.com/cash-management/faqs-cash-management-account 🟢
Feel free to let me know if you have any follow-up questions. I’d be more than happy to help! 🟢