“Take my money!” said no one to any financial institution, ever.
Most of us have had the frustrating experience of checking our bank accounts, only to find our bank has hit us with a non-sufficient funds (NSF) fee because of a declined withdrawal that exceeded our bank balance. NSFs are usually the result of a short-term cash flow issue, and getting hit with a double-digit charge from your bank when you’re clearly tight on cash, to begin with, can often feel like a low blow.
If you’ve been the recipient of one of these fees, we have some good news. By following a few simple steps, you can usually get that bank fee reversed.
What are NSF fees?
A bank will charge you a non-sufficient funds (NSF) fee when there is an attempt to withdraw more money than the available funds in your bank account. NSFs, or overdraft fees, can occur when a cheque is processed or when automatic charges are placed on your account, like a pre-authorized debit from subscription service, a scheduled bill payment, and even the bank’s own service charges. Canadian banks charge between $25 and $48 as an NSF penalty every time a transaction drops you below zero, even if you were only missing a few dollars to cover the cost.
I got an NSF…now what?
Ask to have the fee reversed. I promise you it’s that easy! If your bank account is in good standing and if it’s the first time you’ve ever incurred an NSF (or even the first time in a while), your continued business is more important to the bank than the $45 they’re trying to collect. When requesting to have your NSF fee waived, be sure to follow these basic guidelines.
Be nice
It’s normal to get riled up about the fee, but wait until you’ve cooled down to make the call to your bank. Being polite goes a long way. Put on your best customer service voice, keep calm, and be friendly. Start the call on the right foot by asking the agent how their day is going, and letting them know that you’re sorry to bother them, but that you were wondering if they could help you with a problem you’re having. Put yourself in their shoes. Isn’t it always easier to be patient and helpful with someone that is pleasant, friendly, polite and just in need of a helping hand?
Be persistent
If you’ve gotten NSF fees before or frequently defaulted on credit payments, it’s possible that you might be refused for a refund. Inquire how else they might be able to help you. There is magic in the question, “If you can’t waive the fee, is there any other way that you can help me?”. Encourage them to work with you to find a solution. The customer service agent that you’re speaking with usually has more empathy than people give them credit for, and the last thing they want to admit is, “I can’t help you”.
Avoid NSF fees altogether
Follow these straightforward suggestions to prevent incurring a non-sufficient fund fee in the first place.
- Get protected
Most banks have overdraft protection options that can be added to your existing account for a small monthly fee. If you’ve had multiple NSFs in the past few months, this will probably be money well spent. Talk to your bank about the best solution based on your account and spending habits. - Get reminded
Many banks will offer an email alert service to notify you when your account balance dips below a specified threshold. This “heads up” can give you the time you need to transfer funds into your account or even reach out to the people or companies that might be about to process a withdrawal on your account and request a delay in the transaction until you have the funds to cover it.
Pro tip: Put all your subscriptions and bill payments into your calendar with reminders and now you’ve got a single place to look when you want to see when scheduled payments are going through your account. This is also a good place to record the date your “free trials” end so that you can keep subscription-related costs to only the services that you really want to pay for. - Get a new baseline
Resetting your expectations around your bank account balance can help keep you out of the red. Keep a buffer in your bank account of $100 – $200 and consider that amount as your real zero. When you get caught off guard with an unexpected payment, you’ll be in a better place to avoid an overdraft. - Get a budget
Set up a separate bank account that all of your bills and automatic payments come out of, and only use it to pay those bills. As long as you keep that account funded with the amount of money you need to cover your monthly bills, you’ll always be above water. Then use a different account to manage your discretionary funds. Here’s a helpful monthly expenses template that you can use to plan a simple budget.
Plan for the unexpected
We all experience dry spells in cash flow. Planning for the unexpected and setting aside a little bit of money each week can ensure that you have cash in a pinch when times get tough.
The Financial Consumer Agency of Canada recommends that Canadians keep an emergency fund of three to six months of living expenses, but they also stress that any amount is better than nothing.
Pro tip:
Automate your savings with Moka and build an emergency fund by putting aside a little bit each week.