Managing Your Checking Account

Unit 2: Avoiding Fees 

ATM Fees 

There are no ATM fees when you use machines from your credit union, but the fees can be steep when you use machines outside your network.  Fees range from $2 to $5 per transaction or a minimum of $4 every time you use an ATM to withdrawal cash.  To avoid fees avoid using machines outside your checking network.

  • If you use a so-called "foreign" ATM, you can expect to pay two fees. Your credit union may charge a fee because it has to process a transaction from some other bank's ATM.  And the bank that owns the ATM will charge a fee -- called a surcharge -- because it has to process a transaction from someone who's not a customer.

Nonsufficent Funds 

The nonsufficient funds or NSF fee is one of the most expensive fees you'll encounter. Good management of your checking account will keep you from overdrawing. Develop a system so you won't forget to deduct ATM or check card debits. If you are concerned that you may have less than perfect bookkeeping skills, apply for overdraft protection at the credit union. You'll pay a fee for the service, but it's a lot less than an NSF fee.

  • Non-sufficient funds (NSF) is a term used to indicate that a check cannot be honored because insufficient funds are available in the account. In simplified terms, a check has been presented for clearance, but the amount written on the check exceeds the available balance in the account. It is often referred to as a bad check, or a "bounced" check.

Overdraft Protection

Overdraft occurs when withdrawals from a checking account exceed the available balance. If you have problems balancing your account or write checks often, you might consider overdraft protection which transfers available funds from your savings account, a line of credit or a credit card into your checking account if you happen to overdraft your account. 

A few things you should know about overdraft protection:

  • Make sure that the savings account, line of credit or credit card has enough funds to cover the shortage in your checking account.
  • A fee will be assessed if your account exceeds your available balance and overdraft protection is used.
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