Your Checking Account and how transactions work
Although it might sound like boring banking minutia, knowing the nitty-gritty details will help you understand how money comes and goes from your account. That knowledge is crucial to knowing what your balance is, and how to avoid overdrafts. Plus, we can assure you, it’s not all that complicated.
Balancing your Checking Account
When your Checking Account is balanced regularly, it ensures that the family finances are continuously at the forefront of your thoughts. Having finances parked firmly in your short-term memory may prevent the next impulse purchase when walking through the nearby big box retailer.
Even with today’s technology, transactions do not always post immediately to an account. Gas station and online purchases or payments are just a few examples of transactions that may not post for up to 48 hours. Checking the balance of your account with Southland’s Online or Mobile Banking App may not be an accurate representation of how much money is actually available in your account.
Tracking your spending
Letting even a week pass without reconciling your checking account can be too long. The average person uses their debit card more than12 times a week. Keeping track of your purchases is the only way to know how much money has really been spent. A trip to the convenience store on Monday, a drive-thru on Tuesday, and a stop at the grocery store to pick up a few things on Wednesday may not seem like a lot of money individually, but collectively they add up. By reconciling your checking account frequently, the real balance is always known and could help prevent an overdraft.
It is helpful to know more about how checks, debit card purchases and other transactions are presented to Southland for payment so you know what to expect and how it will affect your balance.
- Checks—A check is not withdrawn from your account until it is presented to Southland for payment. This could take days, even months. It all depends on the individual or business to whom you have written the check. EFT (Electronic Checks) are also the same as a paper check written online or by phone. Many companies allow you to pay online when you enter your checking account information. EFT Checks are also not withdrawn from your account until presented to Southland.
- ATM Withdrawals—An ATM withdrawal is “real-time” and is withdrawn immediately from your account.
- ACH (Automated Clearing House)—ACH is an electronic network for financial transactions. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, and payroll. ACH debits are vendor payments like gym memberships. Deposits are credited to your account and withdrawals are debited from your account when received.
- Debit Card Purchases (PIN based)—A “Debit” purchase using your PIN is also “real-time” and withdrawn immediately from your account.
- Debit Card Purchases (Signature based)—A “Credit” purchase made with your debit card is processed through the VISA network. Southland will immediately place a “hold” on the amount of the transaction while we wait to receive the transaction from the merchant. Once we receive the transaction, the amount is then withdrawn from your actual balance. This can take a couple of days to receive from the merchant and appears as a “pending” transaction. In addition, your available balance may not reflect all of your debit card transactions. For example, if a merchant obtains our prior authorization but does not submit the one-time debit card transaction for payment within three (3) business days of authorization (or for up to thirty (30) business days for certain types of debit card transactions), we must release the authorization hold. The available balance will not reflect this transaction once the hold has been released until the transaction has been received by Southland and withdrawn from your account.
The Difference Between Your “Actual Balance” and Your “Available Balance”
You will often see two different balances in your Credit Union accounts, actual balance and available balance. What is the difference?
Your actual balance is the amount of money that is actually in your account at any given time, but not all funds included in the actual balance are considered available for transactions on your account. The actual balance is also referred to as “balance” on Credit Union ATM screens, mobile Banking or eBranch Online Banking. Your actual balance reflects transactions that have “posted” to your account, but not transactions that have been authorized and are pending or pending deposits that are subject to holds under our Funds Availability Policy. While the term “actual” may sound as though the number you see is an up-to-date display of what is in your account that you can spend, that is not always the case. Your actual balance will not reflect any purchases, holds, fees, other charges, or deposits made on your account that have not yet posted. For example, if you have a $50 actual balance, but you just wrote a check for $40, then your actual balance is $50 but it does not reflect the pending check transaction. So at that point, you actually have $50, but you have already spent $40.
Your available balance is the amount of money in your account that is available to you to use without incurring a Courtesy Pay Fee. The available balance takes into account factors such as holds placed on deposits and pending transactions (such as pending debit card purchases) that the Credit Union has authorized but that have not yet posted to your account.
For example, assume you have an actual balance of $50 and an available balance of $50. If you were to use your debit card at a restaurant to buy lunch for $20, then that merchant could ask us to pre-authorize the payment in that amount or even a different amount. Under this example, if the merchant requested pre-authorization in the amount of $20, we will put a “hold” on your account for $20 (this is called an “authorization hold”). Your actual balance would still be $50 because this transaction has not yet posted, but your available balance would be $30 because of the restaurant’s pre-authorization request that resulted in an authorization hold of $20 in your account. When the restaurant submits its bill for payment (which could be a few days later and for a different amount from the amount of the authorization hold), we will post the transaction to your account and your actual balance will be reduced by the amount of the posted transaction. The available balance is shown as: (1) “available” in Mobile Banking or eBranch Online Banking; and (2) as “available” on Credit Union ATM screens.
Current Balance + Pending Deposit Credits - Pending Withdrawal Debits = Available Balance
Overdraft protection can help you avoid Not Sufficient Funds (NSF) fees when you don’t have enough money in your Southland Checking Account. How does it work? It’s simple! Southland offers Members optional overdraft protection plans that you may apply for, such as a personal Line of Credit where your Line of Credit is used for overdraft protection, and an Overdraft Transfer Service where funds from a linked account are used for overdraft protection. If you apply and qualify for these optional services, we will look first to these services for overdraft protection before applying our discretionary Courtesy Pay Program when your account is overdrawn. A Line of Credit and the Overdraft Protection plan may save you money on the total fees you pay us for overdraft protection, when compared to the costs of the Courtesy Pay Program. Let a representative know what account you would like to protect your account with and in what order. You can transfer from your Savings Account first, then have your line of credit as a back-up.
Overdraft Options Include:
- Savings Account
- Sub-Savings Account
- Another Southland Checking Account
- Money Market Account
- Overdraft Line of Credit
- Personal Line of Credit
- Another account at Southland under a different Membership number. Please include the account number and account ID.
If you decline to utilize any of the optional overdraft protection plans and you are not eligible for our Courtesy Pay Program, and there are not sufficient available funds in your checking account to pay an item, your items will not be paid. It will be returned and an NSF Fee will be charged for each returned item. You also risk having your purchases declined when using your Southland VISA Debit Card.
See your Checking Account Overdraft Agreement for complete details and overdraft elections.