Checking & Savings Accounts
What are Non-Sufficient Fund and Overdraft Fees
Non-sufficient fund fees, known as NSF fees, are charged when your checking account does not have enough money for a purchase or payment you try to make. This purchase or payment could be with a debit card or a check, and rather than allowing the purchase to go through; the bank will reject it and charge you a fee. This is also known as a returned item fee.
Overdraft fees are similar, but they occur when the bank allows a transaction to go through, despite your account balance not being sufficient to cover it. It’s like an emergency short-term loan from the bank, and it comes at a cost. The bank will charge you the overdraft fee, plus you must pay the deficit balance. Overdraft fees and the deficit balance are taken out of the first deposit you make after the overdraft occurs.
1st Source Bank will do what it can to help you avoid paying fees for non-sufficient funds and or overdrafts. We provide information to help you manage and monitor your accounts and we have policies in place designed to protect our customers who’ve established a good record managing their accounts.
1st Source also provides overdraft protection known as a Carefree Line of Credit. It saves you the hassles of an overdraft by advancing funds to your checking account from the credit line. If you make a mistake your Carefree Line of Credit ensures that your checks and debit card transactions are covered – up to the available amount of your credit line1 Your credit line is activated whenever your account balance falls below $0. There is an annual fee of $24 for the service.
If a consumer account (primarily used for personal or household expenses) has been open for at least 90 days and the account is in good standing, we may consider approving overdrafts up to a reasonable amount. All bank fees and charges, including and without limitation, the non-sufficient fund/overdraft fees (as set forth in our fee schedule and our Deposit Account Agreement) will be included in this reasonable amount.
However, 1st Source Bank is not obligated to pay any item presented for payment if your account does not contain sufficient collected (available) funds. Any payment of a non-sufficient fund check or checks (or another item) does not obligate the bank to pay an additional or subsequent non-sufficient fund check or item. Additionally, we are not obligated to provide prior written notice of a decision to refuse to pay any additional non-sufficient check or item.
What are the fees?
The fee for overdrafts is $36 per item2. Also, if your account is overdrawn for 7 or more consecutive business days, we will charge an additional $7 per day. The fee for non-sufficient funds is also $36 per item.
How to Avoid NSF and Overdraft Fees
- Use direct deposit if your employer offers it as a way of getting your paychecks into your checking account faster. That way, you are less likely to be in a situation where you overdraft your account because you have not had time to deposit your paycheck yet.
- Keep track of the balance in your checking account. Online/Mobile Banking allows you to check your account balances anytime and anywhere. It may seem old-fashioned to keep a checkbook register, but this is an excellent way for you to know exactly how much money you have available at any given time. It can take several days for electronic bill pay withdrawals to go through, and even longer for paper checks to clear. Note them in your checkbook register, along with ATM withdrawals and debit card transactions. Then check your balance before making a purchase or writing a check to ensure you have enough money to cover it.
- Opt out of courtesy overdraft protection and instead have your bank link your checking account to a savings account you have at the bank. Then rather than paying the difference and charging you a hefty fee, your bank will transfer money from your savings account to your checking account to cover the purchase and charge you a smaller fee.
- Do not use your debit card to rent a car, buy gas, or check into a hotel. Each of these merchants will often place a hold on your account for an amount far larger than you actually end up spending. The hold may cause you to overdraw your account accidentally because you were not aware that the money on hold was unavailable to spend.
- Keep a buffer in your checking account all the time. Even just keeping a minimum $100 account balance will prevent you from triggering an overdraft when you spend a little more than you planned. Just be sure to think of the last $100 as unavailable. Quickly deposit money to get back up to $100 if your balance drops below that amount.
- Set up an alert so your bank will notify you if your checking account balance falls below a specified amount. If you receive the notifications on your phone, you can instantly adjust your spending to avoid making an overdraft on your account and incurring a fee.
- Carefully manage joint accounts and consider separate accounts if you cannot coordinate your spending habits. If one of you is making purchases the other does not know about, this could easily lead to triggering an overdraft. Unless you can agree on how to track your purchases and maintain clear communication about the joint account balance and scheduled payments, you may be better off with separate accounts.
- If you do trigger an overdraft, deposit money into your account as soon as possible to pay the fee and get a positive balance again. Some banks may charge you an additional fee for each day your balance is negative, or another large fee if your account has a negative balance for several days in a row after an overdraft.
1: Subject to credit approval
2: An Item returned to the payee for insufficient funds may be re-presented multiple times for payment by the payee. Each presentment of the Item by the payee to the Bank for payment is treated as a separate transaction. Therefore, you may incur multiple Non-Sufficient Funds (NSF fees) and Overdraft Item fees for a payment transaction you initiate.