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Managing your checking account balance can be challenging, especially when unexpected expenses arise or transactions post at different times. An overdraft occurs when a transaction exceeds your available account balance, potentially resulting in declined payments or costly insufficient funds charges. The good news is that with the right tools, habits, and account features, you can avoid these fees entirely and maintain better control over your finances. Whether you're new to banking or looking to improve your money management, understanding how overdrafts work and implementing a few simple strategies can save you money and stress.

What is an overdraft?

An overdraft occurs when you don’t have enough money in your account to cover a transaction. You can overdraw your account through checks, ATM transactions, debit card purchases, automatic bill payments, and electronic or in-person withdrawals. The transaction will either be declined, paid into overdraft or returned. Paid into overdraft or returned will result in an insufficient funds charge to your account.

How Can You Avoid Insufficient Funds Charges?

• Open a First Fed Bank On Checking account. This checking account offers no insufficient funds charges, an affordable service charge, and electronic access. We keep it simple with no checks, no complicated pricing structure, and no minimum balance requirements.
  
  
• Do not Opt In to Overdraft Privilege for ATM transactions and everyday debit card transactions. This means if you try to make a purchase with your debit card or withdraw money from the ATM when you don’t have enough funds in your checking account, the transaction will simply be declined and no fee will be charged.
  
  
• Check your account balances regularly. We offer multiple ways to monitor your available balance using Telephone banking, the ATM, Online Banking, Mobile Banking, and you can also call any of our 8 offices. The available balance will tell you how much money you currently have but it does not include checks that haven’t cleared yet and transactions that have been authorized but not posted yet.
  
  
• Sign up for low balance alerts. You can receive a low balance notification through text or email alerts. Set up alerts in Online Banking under Service Center or on the Mobile App under Banking Services. A text or email will be sent to you when your available balance reaches a low limit that you determine. For example, the limit can be set for $50. Anytime your available balance falls below $50 you will be notified.
  
  
• Use our Overdraft Protection products. You can link your checking account to a savings account. If your account becomes overdrawn, money is automatically transferred from your savings for a small fee. We also offer an Overdraft Line of Credit you can apply for. If your account becomes overdrawn, a draw is made from your Overdraft Line of Credit to your checking account. No fee is charged. Just pay back the balance on the Overdraft Line of Credit plus any interest owed. Both these options may be cheaper alternatives to an Insufficient Funds Charge.
  
  
• Keep a check register. Your check register is used for keeping track of your deposits and expenses. All transactions should be recorded, including checks, ATM withdrawals, debit card payments, automatic payments and deposits. The balance in your register reflects what you actually have available and includes items that haven’t posted to your account yet. Review your check register before making transactions.
  
  
• Pay with cash or use a pre-paid debit card. This keeps it really simple. If you don’t have the cash or availability on your card, you can’t make a purchase and your account doesn’t overdraw. This combination can help customers stay on track especially if you don’t monitor your available balance often or record transactions.

After doing all of this if you still happen to end up with an insufficient funds charge, contact us and we will refund one charge each year.