What’s our role as a bank in helping you manage the funds in your account? And how can you best use our services to avoid drawing more funds than you have?
First, let’s talk about what we actually do for you as your bank. We provide a safe place for you to keep your funds and protect them from anyone who might try to take what you’ve earned.
How We Help Protect Your Funds
A checking account is one tool that helps protect your funds. Other banks also exchange funds with us as people purchase things from each other and lend funds for bigger purchases like cars and homes.
Along the way, we provide a variety of tools to help you keep track of your funds—how much you put in your account, how much you take out of it, and the places you have spent them.
Managing Your Funds & Understanding Overdrafts
One important point for you is to put more funds in than you take out. When you use your debit card or write a check, you are making a promise to the seller that when you give that check to your bank your bank will pay them from your account.
When there are not enough funds in your account to cover that promise, that’s known as overdrawing your account or bouncing a check. Once you break a couple promises by writing bad checks, a lot of merchants won’t let you purchase from them anymore.
For example, if Chris writes a check to his grocery store for $135, not knowing he has only $121 in his account, he’s promised them that he will give them more funds than he has. When the grocery store deposits the check with their bank, their bank will contact Chris’s bank to get the promised payment.
If there aren’t enough funds in Chris’s account to cover the promised payment, the check bounces. It bounces right back to the grocery store’s bank, who then tells the grocery store that Chris’s check was not a good promise and he could not pay enough for his purchases.