How to Avoid Overdraft Fees

How to Avoid Overdraft Fees

No one likes to pay the non-sufficient fund (NSF) or overdraft fee. Below are four simple steps you can take to avoid NSF or overdraft charges.

Money gets tight. Bills overlap. You forget you made that purchase or paid that charge. Before you know it, you're overdrawn and the recipient of an NSF (non-sufficient funds) fee. Below are four ways you can avoid these fees and stay on top of your accounts.

Overdraft Fee: What is it?
An overdraft fee, often referenced as an NSF, or non-sufficient fund fee, occurs when you spend more money than you have available. Usually this happens to your checking account. 

How to Avoid Overdraft Fees
There are several different ways to avoid or protect yourself from overdraft fees. 

1. Understand Overdraft Protection*

BECU offers options for covering checking overdraft:

  • Automatic Overdraft Protection
  • Optional Courtesy Pay for Checking Accounts
  • Optional Courtesy Pay Overdraft Service for Debit Card Transactions

Automatic Overdraft Protection links savings, money market, and/or personal Line of Credit (LOC) to checking that covers items posting to the account. Items include:

  • Checks
  • ACH transactions
  • Bill Pay
  • Returned items
  • Point of Sale (POS)
  • ATM/Debit card transactions

Even if you don't have enough money in your account, BECU or your financial institution may approve purchases and debits charged to your accounts to ensure urgent payments are made. However, a fee is charged for this service. Because we're a credit union, the fee BECU charges is typically lower than many financial institutions.  BECU is not obligated to pay items presented if the checking does not contain sufficient available funds to pay the item.  

2. Set Up Account Alerts 

You can set up low balance alerts via the BECU Money Manager feature. For example, when your account hits certain thresholds, say, $100. You can log in online and transfer funds, or delay purchases until your account has more funds. 

3. Create a Budget 

Along with alerts, our Financial Health Check team advises you track your spending and budgeting: Create a budget for each category of spending, and look how you spend throughout the month. Another method for staying on top of your accounts is to set up different checking and savings accounts for the various budget items: rent, home improvements, vacations, etc., and then pay specific bills from each of these accounts. This method gives you greater visibility to your budget, making it less likely to overspend in your main account. The key is planning. 

4. Schedule a Free Financial Health Check 

For additional tips and an in-depth review of your budget, we recommend scheduling a session with our Financial Health Check Specialists. They're like a life coach for your finances. What's more, it's free for BECU members.

Helpful Resources

*Please see the Account Agreement for information on Automatic Overdraft Protection Options and Optional Courtesy Pay Overdraft Service for Debit Card Transactions (purchases only, not ATM cash withdrawals) and the Account Disclosure for more information concerning NSF and Overdraft Fees. 
-To avoid NSF and Overdraft fees, our BECU checking account can be linked to your savings account, money market or personal line of credit. 
-Federal Regulation D limits you to six transfers from your savings account per month and we charge $20 for each transfer beyond six transfers. 
-Courtesy Pay Overdraft Service for Debit Card Transactions in a non-contractual service which is available to individually/jointly owned accounts in good standing, and if you are not in default or delinquent on any BECU account and you have opted in for this coverage. We reserve the right to discontinue this service without prior notice. To opt in and out of this service, you can do so using Online Banking, over the phone by calling us at 800-233-2328, visiting us in person at any BECU location, or mail your request to: BECU M/S 1081-2 P.O. Box 97050, Seattle, WA 98124. 
-Overdraft service should not be viewed as an encouragement to overdraw your account. We encourage you to manage your finances in a responsible manner. An overdraft can occur in your deposit accounts in several ways such as when there are not sufficient funds in your accounts upon (1) the payment of checks, electronic funds transfers, or other withdrawal requests; (2) payments authorized by you; (3) the return of unpaid items deposited to your account; (4) assessment of fees; or (5) when deposited items or no yet available or finally paid, also called “uncollected funds.” We are not obligated to pay any item or payment request presented to your account if your accounts do not contain sufficient funds. BECU may or may not pay an item at our sole discretion. BECU does not include available overdraft amounts in the balance provided by a teller, at the ATM or Point of Sale (POS) debit card transaction, or through Telephone or Online Banking. Optional Courtesy Pay for Checking Accounts in a non-contractual service which is available to individually/jointly owned accounts in good standing. The Overdrawn amount in your account plus any Overdraft Fee that you owe us will be due immediately and payable on demand.