Alterna Bank Coverdraft

Logo: Alterna Bank (CNW Group/Alterna Savings and Credit Union Limited)

I use a relatively unknown bank for my day to day financial needs by the name of Alterna Bank. My needs are relatively simple: direct deposits, pre-authorized debits, bill payments, eTransfers, and occasionally cheques. They’ve served me well and I thought I’d spread the word about a cool feature they have called coverdraft.


I would hope we’re all familiar with overdraft (without having used it) but overdraft is where you either pay per month or per use for the privilege of having the bank loan you some money at a high interest rate to cover a transaction. You’re then expected to pay it back.


Coverdraft is different in that it is using your own money to cover a transaction, instead.

You may ask yourself why would you use this but it’s actually quite simple: having multiple accounts for different purposes. You may have an account with “only touch in case of emergency” funds, an account for bills, an account for vacation, etc.

Coverdraft allows you to avoid any fees for insufficient funds by having another account cover the transaction. Using the above list of accounts a great example would be having your emergency funds account cover your bills account. This is done automatically once set up. Personally I use it as another way to automate my finances, knowing that if something does go wrong then coverdraft will still allow stuff to get paid.

Setting It Up

You need to contact Alterna Bank and instruct them how you want it to work with your accounts. You can have a savings account pull from another savings account, chequing pull from savings, etc.