How do overdrafts and bounced checks happen?
When you write a check, use your debit card to make a purchase, withdraw money from an ATM or make an automatic bill payment for more than the amount in your checking account, you overdraw your account. The bank has the choice to either pay the amount or not. If the bank pays even though you don’t have the money in your account, you may be charged an "overdraft" fee. If the bank returns your check without paying it, you may be charged a "bounced-check" or "nonsufficient funds" fee. In addition, the person or company that you wrote the check to--for example, a store, your landlord, or the phone company--may charge you a "returned-check" fee in addition to the fee your bank charges you.
How can you avoid overdraft and bounced check fees?
The best way to avoid overdraft and bounced check fees is to manage your account so you don’t overdraw it.
- Keep track of how much money you have in your checking account by keeping your account register up-to-date. Record all checks when you write them and other transactions when you make them.
- Pay special attention to your electronic transactions. Record your ATM withdrawals and fees, debit card purchases and online payments.
- Don’t forget about automatic bill payments you may have set up for utilities, insurance or loan payments.
- Keep an eye on your account balance. Remember that some checks and automatic payments may not have cleared yet.
- Review your account statements each month. Between statements, you can find out which payments have cleared and check your balance by calling your bank, checking online or at an ATM.
- Set up an alert through online banking to notify you when your checking account balance falls below a certain level.
What are some alternatives to cover overdrafts?
There may be less costly alternatives to cover overdrafts that are available for you. Here are some recommendations –
Set up an overdraft line of credit
An overdraft line of credit is a loan. Under the terms of an overdraft line of credit agreement, a preset amount is transferred from the line of credit to the checking account whenever an overdraft occurs (up to the maximum line of credit amount). Interest is charged on the amount advanced until the amount is paid back; however, the amount of interest paid on the loan may be less than the amount paid in overdraft fees.
Link your checking account to a savings account
Linked accounts are defined as two deposit accounts tied together. When one is overdrawn, money is automatically transferred to the other. Usually, the linked accounts are a savings account and a checking account. Money is automatically transferred from the savings account to the checking account when the checking account is overdrawn or reaches a pre-defined balance. There is a fee of $10.00 for the transfer service, but the amount of the transfer fee is less than an overdraft fee.
If one of these options sounds right for you, please call 1-877-367-5371.
What if I want Renasant Bank to authorize and pay NSF items that would result in overdrafts on my ATM and everyday debit card transactions?
If you want us to authorize and pay NSF items that create overdrafts on ATM and everyday debit card transactions, call 1-877-367-5371 or click here and complete this form and mail it to P.O. Box 4140, Tupelo, MS 38803, fax the form to 1-888-680-1342, or present it at a branch.
What if I do not want Renasant Bank to authorize and pay overdrafts on any of my transactions?
If you want us to return all checks, drafts, recurring debit and other transactions that would result in an overdraft, call 1-877-367-5371, or obtain a form from your local branch on which you can make your request. There are some overdraft transactions, however, that we cannot avoid as referenced in the terms and conditions for your account.
Financial Education and Counseling
Other options you might want to consider are individualized counseling or financial education. These options may help you more effectively manage your personal finances. There are a number of online resources that may be helpful including:
Your financial well-being is important to us. If you would like more information on applying for a line of credit, starting a savings program, setting up linked accounts or managing your money, please call us at 1-877-367-5371.
If you prefer not to be contacted anymore regarding your overdraft alternatives, please call the above number.