Overdraft fees can be a frustrating and costly surprise for many people. These fees occur when you spend more money than you have available in your checking account, causing your bank to potentially cover the shortfall temporarily. While this might sound convenient, banks typically charge a fee for this service, which can add up quickly if you’re not mindful. Explore what overdraft fees are, how they work, and, most importantly, how you can avoid them to keep your finances in check.


What is an Overdraft Fee?


Understanding overdraft fees is the first step in avoiding them. Essentially, an overdraft fee is charged when you make a purchase or withdrawal that exceeds the available balance in your checking account. Banks may cover the shortfall, but if they do, they will charge a fee for the service. This can quickly add up, especially if you have multiple transactions that exceed your balance. To learn more about the cost of BankIowa’s overdraft fees, visit our fee schedule page here. 


Best Ways to Avoid Overdraft Fees


To avoid overdraft fees, its crucial to monitor your account balance regularly. BankIowa offers online banking and a mobile banking app that allows you to check your balance in real-time. Setting up alerts for low balances can also help you stay informed. To learn about the BankIowa Mobile app, visit the mobile banking app page here. Additionally, keeping a buffer in your account can provide cushion for unexpected expenses. Another tip is to link your checking account to a savings account for overdraft protection, which can be a less costly alternative. Check with your Consumer Banker to determine the best overdraft protection for you.


Here are some practical tips to help you avoid overdraft fees:

  • Set Up Account Alerts
    • Most banks offer text or email alerts for low balances.
  • Monitor Your Account Regularly
    • Use your bank's mobile app to keep track of your balance.
  • Keep a Buffer
    • Maintain an extra amount in your account as a safety net.
  • Consider Overdraft Protection
    • Link your checking account to your savings account.
  • Review Your Transactions
    • Regularly check your account statements to spot any errors or unauthorized transactions.

Avoiding overdraft fees requires a combination of awareness, planning, and utilizing the tools available to you. By keeping a close eye on your account balance, setting up alerts, and considering overdraft protection options, you can steer clear of these unnecessary charges. Remember, managing your finances efficiently not only saves you money, but also reduces stress and helps you maintain better control over your financial health!