I want to use a small savings account for overdraft protection to an older child's checking account. What happens if the checking overdrafts wipe out the savings account? Am I obligated to pay for any bad checks? Will it affect my credit rating?
Untitled
If the bank is willing to accept the savings account as an overdraft buffer, your only exposure should be whatever happens to be in the savings account. If overdrafts wipe out the savings balance, you would have no liability if the checking account goes overdrawn, provided you are not a co-owner of the checking account. If you don't share ownership of the checking account, whatever track record is accumulated on that account should not affect your credit record at all.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
If the bank is willing to accept the savings account as an overdraft buffer, your only exposure should be whatever happens to be in the savings account. If overdrafts wipe out the savings balance, you would have no liability if the checking account goes overdrawn, provided you are not a co-owner of the checking account. If you don't share ownership of the checking account, whatever track record is accumulated on that account should not affect your credit record at all.
