![]() ![]() How do you avoid overdraft fees? The simplest answer is to avoid spending more than you have available, but mistakes do happen. The maximum number of extended overdraft fees you can incur varies by bank. Some banks charge this fee once every 5 days, while others go so far as to assess the fee every day until you bring your balance back above zero. In most cases you have 5 business days or 7 calendar days to fix your balance before theĮxtended overdraft fee takes your account even deeper into the red. This fee is sometimes called a sustained overdraft or extended overdrawn balance fee, and it comes into play when you leave your account balance in the negative for a certain number of days. The final fee in the arsenal of overdraft penalties is the extended overdraft fee. While this can save you money in comparison to paying overdraft or NSF fees, if the bank's policy does not include mandatory notifications for each overdraft transfer, you can end up draining your savings before you realize what's happening. Online banks often provide overdraft protection for free, but if you are at a standard bank, you can expect to pay anywhere from $10 to $12.50 per transfer. ![]() Legally, banks cannot include overdraft protection as an automatic account service, so customers must opt into activating the feature. Overdraft Protection FeeĪlso called the overdraft transfer fee, the overdraft protection fee is charged for every time the bank arranges a transfer from another one of your accounts -usually a savings account -to cover the overdraft. Bank, for example, will only charge up to 4 overdraft fees per day, but counts the limit on NSF fees separately, so that you can end up paying eight separate penalties in a day. However, a few banks do distinguish between the two fees when they count up the daily maximum. Since a bank must choose between approving and declining an overdraft, a single overdraft will cost you either an overdraft fee or an NSF fee, but never both. Practically every bank charges the same amount for overdraft and NSF fees, and the two are often printed as one figure in your schedule of fees. The nonsufficient funds (NSF) fee occurs each time the bank chooses to reject a transaction that overdraws your balance. You can commonly expect banks to charge a maximum of 4 to 6 overdraft fees per day per account, though a few outliers do allow as many as 12 in one day. Typically, banks do not charge the overdraft fee when you overdraw by less than $5.Įvery bank and credit union has its own limit on the number of overdraft fees it will charge in one day. The most obvious fee involved in an overdraft is the simply-named overdraft fee, which occurs each time the bank approves a transaction that exceeds your available balance. ![]() Besides the standard overdraft fee, you may encounter the non sufficient funds (NSF) fee, the overdraft protection fee and the extended overdraft fee. The multiple fees involved in an overdraft represent some of the highest checking account fees that banks charge. While most banks charge similar amounts for each fee, they sometimes apply slightlyĭifferent rules to the way each fee works and when it is charged. ![]()
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