With seasonal spending in full force leading up to the Holidays, now is the perfect time to talk about Overdraft Fees. We know accidents happen and rarely does anyone mean to overdraft their account. To help you make sure you are doing everything you can to avoid paying any unnecessary fees, we sat down with our Sr. Operations & Trust Officer, SVP, Kim Ganus to learn more about Overdraft Fees.
Kim has been at Mabrey Bank for 31 years working in both Treasury Services and Operations and is one of our many financial experts at the bank. Let’s see what she has to say on Overdraft Fees.
1) What are Overdraft Fees, and why do banks put them in place?
Overdraft fees occur when you don’t have enough money in your account to cover your transaction(s). In general, for one-time debit card transactions at ATMs or merchants, consumers must opt-in or agree up front that the bank can charge an overdraft fee for any debit card transaction that overdraws the account.
If you don’t opt-in, you can’t be charged a fee. However, banks may then refuse your transaction if it will overdraw your account. While all banks’ overdraft fees are different, ours at Mabrey Bank is $32.95 each time an item is presented for payment. Those fees can add up quickly, which is why it is very important to stay on top of your accounts.
2) What are NSF (Non-Sufficient Funds) Fees?
While you have a choice to opt-in or opt-out of overdraft coverage for non-recurring debit card transactions, this does not apply to Checks or ACH (Automated Clearing House) transactions such as a direct payment or bill pay services. If you write a check or have an ACH transaction for more money than you have in your account, a bank may not pay the item, but you will still be charged an Non-Sufficient Funds Fee of $32.95.
Sometimes the merchant or business collecting the payment may send the purchase through more than one time to the bank. Then, the bank could charge an Overdraft or NSF Paid and Return Item Fee each time the item is presented for payment. However, both would never be charged for the same payment.
While the mechanics between Overdraft and NSF Fees can be a little confusing, the most important thing to remember is that you will be charged a fee if your bank allows you to overdraft your accounts.
3) What are the most common reasons people overdraft their account?
Honest mistakes happen sometimes but keeping a close eye on your account balance will help you avoid charges for overdrawing your account. Remember to check your balance frequently, at least once per day.
Because it can sometimes be days or weeks before checks post to your account, an outstanding check could overdraft your account if you aren’t careful. Making sure there is enough money to cover all outstanding checks will prevent an accidental overdraft from a delayed check or payment.
By checking your balance often, you should be alerted quickly to any fraudulent activity on your account. A fraudster could incur Overdraft Fees on your account by overspending your balance. If it’s proven that fraud was committed and you were not at fault, those Overdraft Fees would be reversed.
4) What are ways you can protect yourself against Overdraft Fees?
Using Mabrey’s Digital Banking product (online or mobile banking) to check your balance is the best first step to always ensuring you are informed of your account balance. Mabrey allows you to set-up balance and transaction alerts to receive a text notification based on specific criteria you set. For example, you can set an alert if your checking account balance falls below $100.
Mabrey Bank also offers 24/7 Bank by Phone where you can check your balance and hear a listing of transactions.
5) How does Mabrey Bank make it easier for you to avoid Overdraft Fees?
Mabrey Bank offers “sweeps” to its customers which allows the bank to link your Checking account to your Savings, Money Market, or a different Checking account. This way, in case you do overdraw your checking account, we automatically transfer funds from the linked account to cover the shortage, assuming you have sufficient funds in the linked accounts. We offer this service free of charge on personal accounts.
Sometimes mistakes happen, so Mabrey gives you a little cushion for those rare instances. We will not charge a customer on a personal account an Overdraft Fee if the overage on the account is $25 or less. Also, we don’t want our customers to feel like they are being nickel and dimed, so no Overdraft Fees will be incurred for a purchase that is $10 or less.
If you have any questions about Overdraft Fees, give us a call at 888-272-8866, and we would be happy to assist you.