What Are Overdraft Or NSF Charges?
Overdraft or NSF charges happen when your account is overdrawn and has insufficient funds. For the purposes of this article, the terms overdraft, NSF, and insufficient funds are used interchangeably. If a transaction is made that would cause your account balance to go negative, your account is overdrawn and could receive an overdraft charge.
Depending on how your account is set up, Royal might charge an NSF fee and pay the transaction to allow your account to have a negative balance. Or Royal might charge an NSF fee and decline the transaction.
How Can I Avoid Overdraft Charges?
Here are some helpful tips to avoid overdraft charges.
- Stay on top of your transactions. Staying informed of your account balance is the easiest way to prevent NSF charges. You can log in to online banking or check our mobile app to see your balance. You can also record any checks you write and keep your checkbook balanced to avoid surprises. Our Computeller bank-by-phone system is another option for you to get account balances in real time.
- Set up alerts. Our real-time account alerts make it easy to get a notification of your account activity within seconds of an event occurring. Specific alerts like low balance and large withdrawal could help you react and avoid an NSF charge. Alerts can be configured from the mobile app Settings menu using the Push Notifications option. Alerts can also be set up in online banking using the Settings option from the Notifications panel in the upper right corner. Learn more about alerts here.
- Anticipate your transactions. If you know you’ll be close to an NSF situation and you have another source of funds available, transfer the money the night before you need it. While transfers from one Royal account to another Royal account are usually immediate, it can take time for funds to be transferred to a Royal account from another financial. This will also make sure the money is available for any checks or electronic payments that are processed very early in the morning of the next day.
- Avoid automatic or recurring payments. If you have a habit of forgetting about automatic payments that end up overdrawing your account, consider cancelling the automatic payments and making payments manually each month. That way you’ll be able to control exactly when the payment is made and know if there is enough money in your account.
- Do not rely on “processing time” or “float time.” Electronic systems have mostly made processing time a thing of the past. When you write a paper check, often the check will be processed electronically and taken out of your account immediately. Similarly, when you swipe your debit card, funds may be taken out of your account right away. So don’t count on having a day or two after making your transaction to add funds to your account.
- Set up another account as a draw source. If you have another Royal account with funds available, we may be able to configure it as a draw source for your checking account. In the event that your checking account is overdrawn, money can be automatically transferred from your draw source account to your checking account to cover you. A draw source could be a savings account or line of credit.
- Consider Kwik Cash overdraft protection. You might be eligible for Kwik Cash overdraft protection. Kwik Cash is a line of credit intended to cover your account for occasional overdraws. There is an interest charge for using Kwik Cash, but usually the amount will be less than an overdraft charge.