The best type of overdraft program depends on how you manage your bank account. Before you sign up for one, be sure you understand the type of program you're getting and what it might cost.

Here are the five main overdraft programs offered by financial institutions, according to the Federal Deposit Insurance Corp.

Linked transfer accounts
These are contractual agreements between a bank and a customer, linking the customer's transactions account with other accounts within the bank, including savings and credit card accounts. In the event of an overdraft, the bank will fulfill the customer's obligation by transferring funds from the customer's other accounts linked to the transaction account.

Overdraft lines of credit
Overdraft lines of credit are contractual agreements between a bank and a customer that the bank is willing to lend up to a specified amount over a specified period of time to cover overdraft items. These programs do not include line-of-credit programs that don't specifically cover overdraft items, such as home equity lines of credit. The bank extends the line of credit after reviewing a customer using standard underwriting criteria.

Automated, promoted overdraft programs
With an automated, promoted overdraft program, a bank generally honors customers' overdraft obligations and informs customers of the existence of the overdraft protection program. The program is uniformly offered to qualifying customers. Excluded are all overdraft programs where APR is required. The program is automated in the sense that standardized procedures or a "matrix" is used to determine whether the NSF item qualifies for the overdraft protection.

Automated, nonpromoted overdraft protection
These are programs where a bank generally honors customers' overdraft obligation, but customers are not informed of the existence of the overdraft protection program. The program is automated in the sense that standardized procedures of a "matrix" are used to determine whether the NSF item qualifies for the overdraft protection.

Nonautomated, nonpromoted ad hoc overdraft protection
These include truly incidental and discretionary accommodations to customers by banks to honor overdraft items. These decisions are made independent of, or override, the programs above.