Small Business Overdraft

The following applies to each bank account for which you have requested and we have approved a Small Business Overdraft:


Small Business Overdraft Fees and Interest


Fee

A monthly administration fee is charged for each bank account that is approved for a Small Business Overdraft. The current monthly fee is $9.50, and is subject to change by CIBC. This fee is charged whether or not you use the overdraft in any particular month and is in addition to any other charges or fees.
 

Interest

Interest is charged on the amount of your overdraft, up to the approved overdraft limit for the account, based on the interest rate specified in your agreement with CIBC. Current interest rates (subject to credit approval) are as follows:
 

Secured Overdraft

  • Canadian dollar borrowings - CIBC Prime Rate11 +0.5% per year
  • U.S. dollar borrowings - CIBC U.S. Base Rate12 +0.5% per year

 

Unsecured Overdraft

  • Canadian dollar borrowings - CIBC Prime Rate11 +5% per year
  • U.S. dollar borrowings - CIBC U.S. Base Rate12 +5% per year
     

There are two types of overdrafts, secured and unsecured. For a secured Small Business Overdraft, either you or a guarantor may pledge a cash equivalent as security. To do so, you or the guarantor must sign CIBC’s standard Securities Pledge Agreement (in Quebec: a moveable hypothec). Costs incurred by CIBC with respect to the pledge will be charged to you or the guarantor.
 

How overdraft interest is calculated

Interest on your Small Business Overdraft is calculated based on the final daily overdraft balance in your account (up to the approved limit for that account) and charged monthly. Any overdraft balance in excess of your approved Small Business Overdraft limit will be charged interest as indicated under “CIBC Discretionary Business Overdraft” below. Interest that is charged to you, and is unpaid, compounds monthly and continues to compound whether or not CIBC has demanded payment from you, starts a legal action or gets judgment against you.


CIBC Discretionary Business Overdraft

Unless you have made prior arrangements with us, we may refuse to allow an overdraft (or an overdraft that exceeds your approved overdraft limit) and may return your cheque or pre-authorized debit NSF. If we allow an overdraft (or an overdraft that exceeds your approved overdraft limit), the following applies:
 

CIBC Discretionary Business Overdraft Fees and Interest

Fee

  • A fee is charged at the end of each day on which you create an overdraft or increase the amount of your overdraft (that is not an approved overdraft) due to any action you/your business initiate(s) including, but not limited to: cheques, withdrawals, bill payments, pre-authorized debits and INTERAC* Direct Payments.
  • The current fee is $5.00 and is subject to change by CIBC.
     

Interest

Interest is charged on the amount of any overdraft that is not an approved overdraft or exceeds your approved overdraft limit. The interest rate is a variable rate per year equal to CIBC's Standard Overdraft Rate as declared by CIBC from time to time. The current Standard Overdraft Rate is 21% per year.
 

How overdraft interest is calculated

Interest on any overdraft that is not an approved overdraft or exceeds your approved overdraft limit is calculated based on the final daily overdraft balance in your account and charged monthly. Interest that is charged to you, and is unpaid, compounds monthly and continues to compound whether or not CIBC has demanded payment from you, starts a legal action or gets judgment against you.


Need more information?

Contact a CIBC representative or visit a CIBC branch near you.

1-800-465-2422 toll free