NSF (Non Sufficient Funds) is a painful response when you approve a debit on an account that cannot cover it. It happens to the best of us. By the time you find out, the person who was supposed to receive is also not happy because they usually get hit with a fee as well. And it’s a hefty fee.
It’s also a way for banks to collect outrageous fees from you to build their profits.
Most of the major financial institutions will hit you with a $40 fee – if not more – that punishes you. But Cashco would only ding you $10 on their Everyday Use Account.
Why the hefty fees?
A debate continues to rage about the ethics around NSF fees. Banks continue to tangle with government over the many fees they charge. In a few cases, banks have been strong-armed to reduce or eliminate certain fees, but NSF fees remain, for the most part, untouched. So banks have been raising them because they are always looking at ways to grab more of your money and, in light of lost profit from other fees being reduced, they rely on NSF fees to gather that. Rather than help, they punish you when you can least afford it.
What’s worse is that if you’re unaware that your account balance is vulnerable and you write several cheques or authorize debit, you’ll be dinged for each one. You could write five cheques for $10 each and end up being charged $250 for the effort.
Instead of getting your money held hostage when you can least afford it, you’re better off having overdraft on your account to sustain the ups and downs a little easier.
Overdraft is like a line of credit on your account so if your account balance is at or near $0, you can go into negative amounts for some debits and your next deposit will automatically top it off. Cashco’s Everyday Use Account gives you an automatic $25 overdraft when you open an account. And when you add your payroll deposit, you can increase that overdraft to $500 – and ALSO waive the monthly fees.
It’s a simple way to weather some unplanned purchases or the time between paycheques without getting your money taken from you for NSF fees.
The best habit is to be aware of the swings in your account. Know when your balance tends to be lower. Make it a habit to check your account balance before you write a cheque or debit your account. If you don’t have overdraft protection, consider the Cashco account with up to $500 of overdraft. We all have peaks and valleys when it comes to cashflow. Protect yourself.
Lastly, consider the other person. Your bad cheque is their bad experience. Not only do they find out that the money they thought they had is gone, but they are also paying for your mistake with their own bank’s fees. It could lead to further tension, but they might also want to change the way you do business together by demanding certified cheques or e-transfers.