Preventing Overdrafts

How online banking can keep you from overdrawing your account

02/17/2017

Preventing Overdrafts

Seeing red? Prevent a negative balance in your account by following these simple tips, many of which can be achieved with a simple enrollment in online banking.
 

Traditional banking solutions

 
  • Maintain a buffer balance. “Most overdrafts occur due to relatively small sums, often $20 or less. That means you can avoid a lot of overdraft fees by keeping a cushion in your checking account at all times just in case a deposit is delayed or you make a mistake in your register,” says Marcie Geffner of Bankrate.com. U.S. News contributor Simon Zhen recommends a buffer amount equal to the sum of one month’s recurring expenses (rent, utilities, fuel and groceries).
  • Link an account or line of credit. North Shore Bank offers the option of linking a savings account or home equity line of credit to your account that would cover an overdraft if needed. When a transaction causes a negative balance, North Shore Bank will automatically perform an overdraft protection transfer from the linked account to cover the overdrawn amount.
 

Online banking solutions

 
  • Use online bill pay rather than auto pay. Automatic bill pay is a great service as far as convenience goes, but it can wreak havoc on maintaining a budget. Instead of setting up auto pay with billers, utilize online bill pay through online banking. Making the payments manually gives you control over the transaction, so you won’t have to worry about any forgotten expenses pulling your account balance below zero. It’s also a better option than mailing in a physical check, which could take weeks to clear.
  • Dutifully monitor spending. Another benefit of online banking is the mobile aspect. Today you can check your account balance anywhere, anytime—sometimes without even manually signing in. Taking full advantage of that increased potential for vigilance can save you big.
  • Create account alerts. If you find manually checking your balance to be a bit tedious, automate the process instead. Sign up for alerts through your online banking, which will notify you via email or text message anytime a certain event occurs.
 
By simply being observant and taking advantage of the tools and resources provided to you by your financial institution, you should be able to circumvent overdrafts and their corresponding fees.

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Published by North Shore Bank. Includes copyrighted material of IMakeNews, Inc. and its suppliers.

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