Unavailable Funds vs. Non Sufficient Funds

Do you know the differences between these two?

Many times customers do not realize that checks can be paid on funds that have not been made available yet by the bank. When checks are paid against uncollected funds or unavailable funds, you will pay a fee. Ok so what if you have overdraft protection? Overdraft protection will not work in this case because you have the funds in your account, it's just that they are not available for withdrawal or payment yet but banks will take on the risk of paying these items. Many customers are not aware that overdraft protection can't help you avoid the fee paid against unavailable funds.

Non sufficient funds is simply not having enough money in your account to pay the items that were presented. Now, regardless wether those items are paid or returned; you will be charged a fee. If you have overdraft protection then you will avoid thse fees.

Ways to avoid unavailable funds fees:

• Instead of deposting the funds into your checking account, deposit them into your savings account and transfer the money you already have available in the savings account to the checking account.
• If the funds you are depositing come from any government agency or municipality, ask the manager if the funds can be available the next day, most banks if not all, have special deposit slips for these types of checks
• Ask for a funds availability schedule from your bank, each check depending on it's routing number will have different availability schedules. The routing number determines the location of the issuing bank.
• If you are depositing a large amount of money, like proceeds from the sale of a home; then you may want to ask for the funds to be wired to your account instead of receiving a check.
• Sign up for direct deposit from your employer, pension, social security, etc.

These tips will help you have your funds available sooner.