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Navigating Your Finances

Managing your finances effectively involves being aware of various banking terms and fees that can impact your account. Some commonly used terms that can cause confusion are NSF (Non-Sufficient Funds) fees and overdraft fees. Then, add in Transfer Fees, and things can get even more confusing quickly. Let's explore these fees and their differences to help you navigate your financial experience more confidently.


Non-Sufficient Funds (NSF) Fees

Non-Sufficient Funds (NSF) fees occur when there is not enough money in your account to cover a transaction. This could happen when checks, electronic payments, or recurring debit card transactions are presented for payment. When this happens, an NSF fee will be charged, and the item or transaction will be returned.

To support our members in reaching their financial goals, ARC has decided to eliminate NSF fees, particularly during economic hardship. We understand that when funds run low, every penny counts, so we want to ensure that our members are not burdened with additional fees. This change will allow our members to better manage their finances and avoid unnecessary expenses, ultimately increasing their chances of achieving financial success. In the past, you'd have seen a fee with a description of "NF" followed by the name of the person/business whose transaction or item was returned. We'll still alert you with a notice that you've had an item returned and you will see details in your transaction history, but there will not be a fee.

Key points about NSF fees:

· Your item/transaction is typically returned "unpaid."

· Occurs when you don't have enough money in your account to cover a transaction or when a transaction attempts to exceed your overdraft limit.

· These fees are typically charged per occurrence, meaning a fee is "triggered" each time the transaction is presented without sufficient funds.

· NSF fee amounts can vary significantly from one financial institution to another.


Overdraft Fees

Overdraft fees, like NSF fees, occur when there is not enough money available in your account to cover a transaction; however, the transaction is allowed to post, resulting in a negative balance and a fee. Essentially, the financial institution extends you credit to cover the overdrawn amount, and you are charged a fee for this service.

ARC calls our Overdraft fees, Courtesy Pay fees. In your ARC account's transaction history, you'll see a fee with a description of "CP" followed by the name of the person/business whose transaction caused your account to go negative. You may refer to ARC's fee disclosure for how much ARC currently charges per Courtesy Pay.

Key points about Overdraft fees:

· Your item/transaction is "paid."

· Occurs when a transaction is allowed to post to your account, resulting in a negative available balance.

· Overdraft fee amounts can vary between financial institutions.

· Checks and electronic payments are automatically enrolled for ARC's Courtesy Pay unless you instruct us otherwise. However, you must opt-in to have your debit card transactions covered.

· ARC offers alternative overdraft protection services, such as linking another account or a line-of-credit to cover overdrafts, potentially avoiding fees.


Transfer Fees

You may have seen a "transfer charge" on your account at ARC in the past. These were related to a federally imposed rule that limited the number of certain types of withdrawals or transfers out of a savings account to six per month. If you had more than six of these qualifying transactions in a calendar month, you would see a $3 fee for each one after six.

ARC has eliminated transfer fees. You may transfer money from your savings account as many times as you want. You can even allow your savings account to automatically transfer funds to your draft (checking) account when there are insufficient funds to cover a transaction.

Key points about Transfer fees:

· Transfers, like automatic overdrafts from savings to checking to cover an incoming payment, were previously considered one of the qualifying transactions that were limited to six/month.

· The Federal Government ended the regulation limiting the number of withdrawals from a savings account in response to the COVID-19 pandemic. Financial institutions were not required to eliminate the fee at that time, but they did not have to continue to restrict the number of permitted transfers.

· Check with your financial institution on their current fee structure.


How to Avoid These Fees

Understanding the differences between NSF and Overdraft fees is crucial, but knowing how to avoid them is equally important.

Consider the following tips:

· Keep a close eye on your account balance to prevent overdrawing or having insufficient funds.

· Set up account alerts to notify you when your balance falls below a certain amount.

· Use an alternate form of overdraft protection, like a linked savings account with emergency funds to cover unexpected transactions, or apply for an overdraft line of credit.

· To ensure you always have sufficient funds for your transactions, create a budget and monitor your spending.

Being informed about potential account fees empowers you to make better financial decisions. Help minimize the impact of these fees on your overall financial health by paying close attention to account activity, managing your accounts responsibly, and exploring available safeguards. Take control of your finances and pave the way for a more secure and stress-free financial future.