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Unavailable funds fee
Overview
The "unavailable funds" fee, not to be confused with the "NSF", "overdraft", "exceed hold" or "overlimit" fees, is a fee that results from a transaction that posts to a negative available balance and a positive physical balance, as applied to a Demand Deposit Account; usually a checking account. The fee is typically applied at the end of the business day, as most banks process transactions at the end of each business day. To understand how an "unavailable funds fee" comes to be, it is very important to understand the following 3 parts of a checking account:Posted Balance
Available Balance
Holds
The Posted Balance
The "posted balance" is money that physically is in the account. This balance is the result of a transaction that has a date in the past. This is the actual or the "real balance" of the money in the account.
The Available Balance
The "available balance" is the "posted balance" minus the total of the "holds" that have that date or a date in the future, for example use this sample from an imaginary account with an opening balance of $100.00 In this example only $20.00 has physically left the account, but for some reason $10.00 is on hold.
| date | serial # | description | amount | posted | HOLDS | available |
| 01-01-06 | DBC | gas | $5.00 | $95.00 | $10.00 | $85.00 |
| 01-01-06 | 1001 | check | $15.00 | $80.00 | $10.00 | $70.00 |
The Hold
A "hold" is money that the bank has either chosen or is not allowed to make available to the customer. "holds" originate from deposits, notice of returns, notice of collection, and most common are check cards/debit cards (aka: DBC) purchases. A "hold" is assigned a dollar value and a time frame, a number most often from 1 to 14 days. Holds are not permanent and may disappear and reappear. After the hold time it will usually become a "posted transaction", but may disappear. At this point, when the transaction posts it can generate a fee. Here is an example of holds over a period of time
| date | value | 01-01-06 | 01-02-06 | 01-03-06 | 01-04-06 | 01-05-06 | 01-06-06 | 01-07-06 |
| deposit | +$100.00 | $100.00 | $100.00 | $100.00 | ||||
| DBC gas | -$10.00 | $10.00 | $10.00 | $10.00 | ||||
| DBC music | -$15.00 | $15.00 | $15.00 | $15.00 | ||||
| DBC food | -$25.00 | $25.00 | $25.00 | $25.00 | ||||
| DBC Phone | -$15.00 | $15.00 | $15.00 | $15.00 | ||||
| DBC net | -$35.01 | $35.01 | $35.01 | $35.01 | ||||
| total | -$00.01 | -$100.00 | -$110.00 | -$175.01 | -$100.01 | -$90.01 | -$25.00 |
In action
Note that in this example the customer has over spent by one penny, but has generated 4 extra fees. the average overspending fee is about $30.00. These fees occur when a transaction post to the account and the available balance is negative. In this example there is 5 purchases ($10.00 for gas, $35.01 for net, $15.00 for phone, $15.00 for music and $25.00 for food, total =$100.01) and a standard deposit hold.
| date | Posted Balance | amount | description | new balance | HOLDS | available | FEE Caused | whats on hold |
| 01-01-06 | $0 | +$100.00 | deposit | $100.00 | $100.00 | $0 | none | none |
| 01-02-06 | $100.00 | $0 | n/a | $0 | $100.00 | $0 | none | none |
| 01-03-06 | $100.00 | $0 | n/a | $0 | $100.00 | $0 | none | none |
| 01-04-06 | $100.00 | $0 | n/a | $0 | $200.01 | -$100.01 | none | $10.00 gas,$35.01 net,$15.00 phone,$15.00 music,$25.00 food,$100 deposit |
| 01-05-06 | $100.00 | -$10.00 | gas | $90.00 | $90.01 | -$00.01 | unavailable | $35.01 net + $15.00 phone + $15.00 music + $25.00 food |
| 01-05-06 | $90.00 | -$30.00 | fee | $60.00 | $90.01 | -$30.01 | none | $35.01 net + $15.00 phone + $15.00 music + $25.00 food |
| 01-06-06 | $60.00 | -$35.01 | net | $24.99 | -$25.00 | $-0.01 | unavailable | $25.00 food |
| 01-06-06 | $24.99 | -$15.00 | phone | $9.99 | -$25.00 | -$15.01 | unavailable | $25.00 food |
| 01-06-06 | $9.99 | -$15.00 | music | -$5.01 | -$25.00 | -$30.01 | overdraft | $25.00 food |
| 01-06-06 | $-5.01 | -$30.00 | fee | -$35.01 | -$25.00 | -$60.01 | none | $25.00 food |
| 01-06-06 | -$35.01 | -$30.00 | fee | -$65.01 | -$25.00 | -$90.01 | none | $25.00 food |
| 01-06-06 | -$65.01 | -$30.00 | fee | -$95.01 | -$25.00 | -$120.01 | none | $25.00 food |
| 01-07-06 | -$95.01 | -$25.00 | food | -$120.01 | $0.00 | -$120.01 | overdraft | none |
| 01-07-06 | -$120.01 | -$30.00 | fee | -$150.01 | $0.00 | -$150.01 | none | none |
financial institutions know to have implemented unavailable funds fees
United States of America
Bank of America, N.A
Wachovia bank, N.A.
U.S. Bank, N.A.
Suntrust Bank, N.A.
Sovereign Bank N.A.
Governance
United States of America
not all overspending fees are officially defined or regulated in the United states
USA national banks, Office of the Comptroller of the Currency
Credit Unions, National Credit Union Administration
Savings Associations, Office of Thrift Supervision
Federal Reserve Consumer Help
See also
External links
This article is licensed under the GNU Free Documentation License.
Last updated on Sunday October 05, 2008 at 15:27:34 PDT (GMT -0700)
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