My Yahoo!Finance column that posts on August 21 examines at the continued growth in overdraft fees. The easiest way to avoid an overdraft fee is find a bank that offers “account alerts” or “balance alerts.” You specify a minimum balance you want to keep in the account, and the institution alerts you – by phone, email or text message – when your account balance has fallen below that level. (If you get your alert by mobile phone, check with your cell phone service to make sure you aren’t charged a fee for the text.)
How do I personally avoid overdrafts? I write down every transaction in my checking account register. Then I log on every few days to see which transactions have cleared. I look at what’s still scheduled to be paid in online bill pay, and add that to anything unpaid in my register (written checks) and then subtract from the account balance. If I’m too close to the minimum balance required in the account, and I won’t be making a deposit in the next week or two, I transfer in money from my online savings account (a.k.a., the emergency fund).
Follow the links here to learn about account alert services at the nation’s top ten banks. When I did the search for this information, I started in the “free checking” area of each website. Make sure whatever service you sign up for, your deposit agreement or schedule of fees specifically states the account alert service is available for free.
One other tip – if you sign up for bank alerts, beware of phishing. This is when a scam artist sends you an email that looks like a formal notice from your bank — in an attempt to get you to reveal your account information. Never reply to an email requesting account information or passwords.