First and foremost, manage your account so you always have a positive balance. You can do this by keeping your account register up to date. Enter your checks and transactions into the register when you write them or when you make them. Those small debit card deductions can add up quickly and you won’t be able to remember them at the end of the day, so put them down at the time you make them. Remember to subtract fees. Add interest, record automated recurring payments you may have set up for utilities, insurance or loans. Record ATM withdrawals along with fees charged for ATM use. To avoid service fees, do not write checks or perform transactions if you have an insufficient balance in your account.
Monitor your account balance and remember the balance that the bank shows may not include some checks and automatic payments you have authorized for payment. Keeping an accurate check register is your best way to know the amount of money you actually have available to spend, regardless of what your bank balance is at any given moment. Check your balance and your activity regularly through internet or mobile banking or contact your local branch.
If you are monitoring your account regularly and realize that you have an item, either paid or returned, that overdraws your account and causes you to be charged a fee, subtract that fee amount in your check register to keep your balance correct. If you overdraw your account, get money back into your account as soon as possible and remember you will need enough money to cover both the overdraft and amount and any bank fees Do not make any more transactions until you have brought your account to a positive balance.
In spite of the best management care, mistakes and emergencies can happen and you may write a check or make a withdrawal while hoping your deposit will get to the bank before the withdrawal. If, in spite of your best efforts, you have a check or debit “bounce”, one of two things will most likely happen: Either the Bank may pay your overdrawn item and charge you a fee, or the Bank may NOT pay your overdrawn item, will return your check and will charge you a fee.
You may sign up for overdraft protection. Overdraft Protection ensures your checks are paid (up to the Overdraft Limit) and that ATM and debit card transactions are honored at time of purchase (if you have opted in for that service). You may still pay overdraft fees to the bank for each item paid, but you will avoid the merchant’s return check fee or the embarrassment of having a transaction declined while at the merchant’s counter.
You may also be able to reduce or avoid overdraft fees by linking your checking account to a savings account or a different checking account in the bank. If you overdraw your checking account, the bank will transfer available funds from your linked account to your checking account to cover your transactions for a small fee that is less than an Overdraft Fee. This does necessitate that your keep adequate funds in your linked account.
Consider setting up E-mail or Text alerts customized to your specifications. You can set up alerts to notify you when your account balance at the end of the previous business day falls below or goes above the dollar amount you specify. Or you can set up periodic balance alerts to be sent to an internet email address or any internet-enabled mobile device.
Additional information is available from government sites such as www.fdic.gov/consumer, or you can download a booklet entitled “Protecting Yourself from Overdraft and Bounced-Check Fees” at www.federalreserve.gov/pubs/bounce.