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We know that overdraft fees are a hassle to deal with. Luckily though, there are measures you can take to ensure that they don’t happen. Many financial institutions offer support like overdraft protection to keep you covered in these less than favorable moments. But, before we go any further, let’s take a step back and look at the mechanism behind an overdraft.
First and foremost, don’t feel bad if you’ve experienced this before. Tens of millions of people go through the same thing in a given year, meaning there’s clearly a common thread. At Newton Federal, our goal is to keep you informed so that you won’t find yourself in this predicament.
Defining Overdrafts
So what exactly is an overdraft fee? This occurs when a transaction is applied to an account that doesn’t have the available funds to cover it. Sometimes, the bank will spot you the difference, but other times you may not be so lucky. But in both instances, you can expect to be charged for the overdraft.
It may seem simple enough to manage, but there are some factors that make the process a bit of a headache. For one, there’s actual posting time of a transaction. Let’s say you know you have a certain amount in your account. You make a purchase, but it doesn’t post to your account immediately. You forget that you made the purchase, then go about spending more money out of the account. If there isn’t enough in your account by the time it finally does post, you’ll likely incur an overdraft fee.
Knowing the Ins and Outs of Overdrafting
The best piece of advice we can give is to always know the state of your account and its overdraft policy. You can even have notifications set up to inform you whenever your account balance is running low. Some banks even allow you to disable overdraft fees; they simply reject the transaction.
Another great option would be to establish a connection between your checking account and another checking or savings account. You can set the permissions to allow the main account to dip into the back up account’s balance to avoid overdrafting. This of course means you’d need to keep a steady flow of capital in the back up account. Or you can secure a credit line specifically aimed at protecting against overdrafts.
Banking with Newton Federal
Also, keep in mind that there are no finish lines here. Your business plan is a tool to support you through the marathon of owning a business. It will need constant revisiting and possible tweaks. But in the end, the effort will show in your brand's sustained growth.
Have business banking needs that aren't being met? That's where Newton Federal comes in. We offer various business accounts, as well banking tools to help ease the demands of being a business owner. Contact us today; our bankers are on hand to see to it that you get the support you need.
Serving The Banking Community Since 1928.
Have business banking needs that aren't being met? That's where Newton Federal comes in. We offer various business accounts, as well banking tools to help ease the demands of being a business owner. Contact us today; our bankers are on hand to see to it that you get the support you need.
Serving The Banking Community Since 1928.
