Understanding Your Account Balance for Overdrafts

Your checking account has two kinds of balances: the actual balance and the available balance. You can review both balances when you review your account online, at an ATM, by phone or at a branch. Direct Financial uses your available balance when determining whether a transaction will cause your account to overdraw and for charging overdraft and NSF fees.

The information below explains how your checking account balance works – including the differences between your actual balance and your available balance. Examples are used to help explain when we may charge an overdraft fee due to an insufficient available balance.

You can opt out of any or all Courtesy Pay options offered by Direct Financial by calling us at 800.966.8200. To learn more about the Direct Financial’s overdraft options, please visit our courtesy pay page.

Example of Overdraft Fee for Insufficient Available Balance

If your actual balance and available balance are both $100 and you use your debit card at a restaurant for $35, an authorization hold is placed on your account and your available balance will be reduced to $65. Your actual balance is still $100 because the transaction has not yet posted to your account. If a check that you had previously written for $75 clears through your account before the restaurant charge is sent to the Direct Financial for processing – you will incur an overdraft fee. This is because your available balance was $65 when the $75 check was paid. In this case, Direct Financial may pay the $75 check under either an Overdraft Protection transfer option (transfer of available funds from a pre-established linked account or line of credit) or the Courtesy Pay option. An Overdraft Protection Transfer or Courtesy Pay fee will also be deducted from your account, further reducing your balance.

Your Actual Balance

Your actual balance is the amount of money that is actually in your account at any given time. Your actual balance reflects transactions that have “posted” to your account but it does not include transactions that have been authorized and are pending. While it may seem that the actual balance is the most up-to-date display of the funds that you can spend from your account, this is not always the case. Your account may have purchases, holds, fees, other charges, or deposits made on your account that have not yet posted and, therefore, will not appear in your actual balance.

Example of Actual Balance

If you have a $100.00 actual balance and you wrote a check for $60.00, then your actual balance will show $100.00 because the actual balance does not include the pending check transaction which has not yet posted. While your actual balance is $100.00, you have already spent $60.00.  

Your Available Balance

Your available balance is the amount of money in your account that is available to you without overdrawing your account. Your available balance takes into account holds that have been placed on checks you have deposited and pending transactions (such as pending debit card transactions) that Direct Financial has authorized but that have not yet posted to your account.

Example of Available Balance

If your actual balance and available balance are both $100 and you use your debit card at a restaurant for $35, the merchant could ask Direct Financial to preauthorize the payment. Direct Financial would place an “authorization hold” on your account for $35. Your actual balance is still $100 because the debit card transaction has not yet posted to your account; however, your available balance would be $65 because you have already authorized the $35 payment to the restaurant. When the restaurant submits the transaction for payment (which could be a few days later and could be for a different amount if you have added a tip), Direct Financial will post the transaction to your account and your actual balance will be reduced.

Learn More About Debit Card Authorization Holds

Reliability of Your Available Balance

You can review both your actual and available balances when you review your account online, at an ATM, by phone or at a branch. However, it is important to understand that you may still overdraw your account even though the available balance appears to show there are sufficient funds to cover a particular transaction. This is because your available balance may not reflect all your outstanding checks and automatic bill payments that you have authorized (or other outstanding transactions) that have not yet posted to your account. Additionally, your available balance may not reflect all of your debit card transactions due to circumstances outside of Direct Financial’s control.

As demonstrated by the examples below, the best way to know how much money you have available (including all prior checks and authorizations) is to record and track all of your transactions closely.

Examples of Transactions Not Reflected in Your Available Balance

Outstanding Checks and Bill Payments: If you have written checks from your account or have set up automatic bill payments, those transactions will not be reflected in your available balance when authorized. Rather, these transactions will be reflected in your actual balance and available balance when transactions post to your account.

Debit Card Holds: If a merchant obtains Direct Financial’s authorization but does not submit a one-time debit card transaction for payment within three (3) business days of authorization, Direct Financial must release the authorization hold on the transaction. Since the hold has been released, your available balance would not reflect this transaction until the transaction has been received by Direct Financial and paid from your account.

Learn More About Debit Card Authorization Holds