How to Avoid Overdraft Fees


We receive many phone calls from customers who have overdrawn their accounts. One common complaint I’ve heard is that customers use a register booklet AND our online services regularly, but still managed to incur overdraft fees. Entering any information manually is never easy. Truth be told, I’ve avoided using a register for years. Unfortunately, as I have gotten older my memory isn’t as sharp as it used to be. It took a lot of trial and error but here are six tips to consider:



1. Use a Calculator

If you don’t own a calculator, or if you’re like me and misplaced it several times, you can use an online calculator instead, like this one.This is a third party link. Please review the third party content guidelines by clicking here for more details.  Most smart phones also have a calculator built in.


2. Record Every Transaction Including Applicable Bank Fees

I like to write down the exact figure to the penny. My husband likes to round the figures in the checking account up so he can have a cushion. For more tips, check out my previous blog here.This is a third party link. Please review the third party content guidelines by clicking here for more details.


3. Record Direct Deposits

If your job offers direct deposit, it will be a time saver for you. Not only will you avoid a trip to the bank, the funds are immediately available in your account once it has been posted. However, be careful not to record your deposit until it’s officially posted into your account.


4. Record Check Deposits

If you receive a paper check, ask a teller about when the funds will become available or consult with your financial institution’s Disclosures. Ours is located at the bottom of our website or click here.

Instead of recording the date that you make the deposit, I find it easier to enter the day of when the check will become available. For example, if I’m a new customer and I deposit my check on May 3, 2012 and was told it’ll become available in five business days then I jot down May 10, 2012 on my register and highlight it in orange.

Generally, most funds will become available to you within one or two business days. Keep in mind that your bank needs this time to get the funds from the issuer’s financial institution, even if the funds are coming from an account from the same institution. A teller can give you an estimated time when the funds will become available. If there is a longer delay, the teller will hand you an extra slip or you will receive a letter in the mail. Check out Kieza Carpenter’s blog for details about deposit holds.


5. Use Register Software Programs

I recommend that you enter your figures manually on a daily basis. When you export six or more months’ worth of transactions into your electronic register, it will cause a world of confusion. For example, we presently show the available balance and current balance in the transaction history section. Available Balance is the amount that is available for withdrawal. Any holds that exist are reflected in this balance in accordance with our funds availability policy. Your Current Balance represents the prior business day’s closing balance adjusted for any transactions received by us but not yet posted.


6. Review Your Accounts Online Daily

It’s a good idea to review your accounts daily to make sure there are no fraudulent charges, and to see what transactions have been posted. If you don’t have your register with you, always deduct any outstanding transactions (i.e., transactions that haven’t posted yet) off your available balance in order to determine what your actual balance is so you don’t overdraw your account.

Overdraft fees are never fun, but you can avoid them if you keep tabs on how much is coming in and going out of your account on a daily basis. Do you use a register booklet or an online version? What tips can you share?