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Life moves. So does money — in and out of your account.

With all that movement, mistakes happen, and overdraft or non-sufficient fund (NSF) fees can result.

The good news: A little knowledge can help you avoid the pain of overdraft and NSF fees. Let’s dive in to the basics of how these fees come about and what options are available to you.

What is the difference between overdraft and NSF fees?

When there’s not enough money in your account to cover a transaction, one of two things can happen.

1. Your financial institution can pay the transaction, resulting in your account being “overdrawn” (having a negative balance). This can result in an overdraft fee.
2. Your financial institution declines to pay the transaction, citing non-sufficient funds. This can result in an NSF fee.

What kind of transactions can result in an overdraft?

Many transaction types can overdraw your account, including scheduled bill payments, ACH debits, checks, and debit card transactions.

What is the difference between actual balance and available balance?

When transactions are pending, it can be difficult to keep track of how much money you have in your account. That’s where understanding the two kinds of account balances can be helpful.

Actual balance

Also known as ledger balance, this is the amount of money actually in your account at any given time. If you’ve scheduled a bill to be paid next week, the actual balance will show the money as still in the account. Why? Because it’s actually still there. The payment hasn’t gone through yet.

Available balance

This number is more important, because it is a more accurate reflection of the amount of money you still have available for spending. It does this by accounting for many pending transactions — even if they haven’t cleared your account yet. Keep in mind that some pending transactions, such as some scheduled payments, may not show up in your available balance. While available balance may not show everything scheduled to come out of your account, it’s a helpful tool to check for pending transactions.

What are some things I can do to keep from overdrawing my account?

Budget! Creating a plan for your expenses and tracking your spending makes it less likely to be surprised. Check out Numerica’s budgeting workbook to get started.  

Another option is setting low-balance alerts on your account. These work as a safety net, alerting you with a text or email if your account balance dips below a preset dollar amount. Whether you’ve set up alerts or not, one of the best ways to avoid surprises is to check your account balance regularly.

What should I do if I overdraw my account?

When your account is overdrawn, you need to deposit money as soon as possible. You will need to cover the amount of the transaction plus any fees.

If you need help, your financial institution can help walk you through the details. At Numerica, we want to answer your questions and help you avoid future fees. Give us a call at 800.433.1837 or stop by a local branch.

What is Overdraft Protection?

No one enjoys having a transaction returned for non-sufficient funds. In addition, some merchants charge additional fees when a payment doesn’t go through.

Overdraft Protection is a way to shield yourself — and your money — from these consequences. By asking your financial institution to pay these transactions, you may avoid returned item fees and late payments. You could also save yourself from potential embarrassment and inconvenience at the cash register.

How do I opt in or out of Overdraft Protection at Numerica?

To ask about or adjust the protection on your account, call us at 800.433.1837 or stop by a branch. You’re not alone in your financial journey. Reach out to discuss your financial well-being today.