Choose an overdraft program that works best for you

Having to pay extra money that you weren’t expecting is never fun. Overdraft fees have become pretty common; according to a 2021 study from the Federal Reserve, 11% of adults had paid an overdraft fee in the previous 12 months.

But the good news is that they’re easy to avoid!

What’s an overdraft fee?

If you make a purchase with your checking account – which includes things like writing a check or scheduling an automatic payment – but don’t have enough funds in your account to cover it, you can be charged a fee by your bank for covering your deficit. (And if you don’t realize it and continue to make payments or purchases, more fees will be added.)

At INB, we want to work with you so your account stays in the black, and you don’t incur extra fees.

Here are some of the best ways to avoid overdraft fees:

Monitor your balance: Keep an eye on what goes into and comes out of your account; at INB, we strongly encourage using a paper check register or manual spreadsheet for accuracy! You may have a lot of activity to watch: bills that are automatically deducted, ATM withdrawals, checks you write, purchases with your debit card.

Need help keeping track of your spending? Download the INB app to digitally monitor all of your account activity. You can sign up for app or text alerts too.

Learn more

Link your checking and savings account. When your accounts are linked, INB can pull money from your savings account if you don’t have enough money in your checking account to cover a transaction. This way, if you overdraft your checking account, the shortfall is covered by your savings. (Please note: there is a $5.00 fee per transfer if this service is used.)

Sign up for a Cash Reserve: You can get an automatic line of credit built right into your checking account to cover overdrafts. This is essentially a loan from the bank to cover the money you’re spending but don’t have.

A few things to note: eligibility for a Cash Reserve is subject to credit approval. There is an annual fee for Cash Reserve. You will be charged interest on the balance, and monthly payments are required until the line of credit is paid in full.

Keep a cushion: It’s always better to create a buffer in your account. If you're worried about overdrafting, you can make a deposit to your account to ensure that you have enough funds.

Opt out of overdraft protection: If you opt out of overdraft protection, one-time debit card transactions that would cause your account to go into overdraft will simply be declined, rather than incurring a fee. (Please note: a check or other kind of payment would still overdraw your account.)

Talk to your bank: If you don’t have a history of overdrafting and made a rare mistake, you may be able to get the fee waived.

To avoid fees, it’s always better to be proactive. Keeping track of your balance and sticking to a budget will put you in control of your money and ensure you have enough to cover all of your purchases. 

Need help with the lingo? Check out INB’s glossary of overdraft terms:

Current balance: Your account’s actual balance, or current balance, includes payments and deposits which have posted to your account. This balance does not include outstanding transactions such as checks not yet cleared or electronic transactions authorized but still pending.

Available balance: Your available balance, also called memo balance, represents the money available in your account to make payments. This balance takes credit and debit transactions (regardless of their source) which have been authorized but not yet settled and adds or subtracts them from the actual balance. Additionally, when calculating this balance, any holds placed on deposits which have not yet cleared are also subtracted.

Memo balance: this is just another term for available balance. Your memo balance or available balance is the funding you can use for purchases and withdrawals. 

Overdraft: Generally, an overdraft occurs when there is not enough money in your account to pay for a transaction, but the bank pays (or covers) the transaction anyway. 

Non-Sufficient Funds (NSF): An NSF transaction is slightly different than an overdraft. In an NSF transaction, the bank does not cover the transaction. Instead, the transaction is rejected and the item or requested payment is returned. In either situation, you will be charged a fee.