This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Beware New Checking Account 'Opt-In' Rules

NEW YORK ( TheStreet) -- Federal Reserve rules on checking accounts started this past weekend, and some Americans may be surprised by the changes, especially this one: Overdraft protection is no longer available for checking accounts unless customers "opted in."

Before these Federal Reserve rules took effect, most banks automatically added overdraft protection to checking accounts, providing the details and fees in the fine print. Some customers didn't realize the high price of the fee until they incurred the charge.

An overdraft occurs when there isn't enough money in a checking account to pay for a transaction, but it is paid by the bank anyway. This isn't free; it's a loan from the bank, and banks charge a nonsufficient-funds paid item fee -- typically $30 to $40 -- for each transaction paid in this manner.

If you didn't opt in for this, your bank's standard overdraft practices no longer apply to your everyday debit card and ATM transactions. Now transactions will typically be declined when you don't have enough money in your account, but you will not be charged overdraft fees.

The rules don't lock you to your choice forever; you can still make changes to your account, opting in or out of overdraft protection at any time.

The rules are good for consumers but reduce revenue for banks. Some banks will try to persuade customers to choose the "benefits" of overdraft protection, since they are anxious to hold on to as much fee income as they can. The Consumerist website reported last week on the branch manager of a bank who quit because he felt his employer was forcing him to trick customers into signing up.

This is a good time to sign up for free online alerts offered by most issuers. You can get a daily text or e-mail telling you the balance in your account. Knowing the amount of money in your checking account can help avoid the embarrassment of a declined purchase.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
WFC $54.81 -1.20%
AAPL $128.49 -0.67%
FB $80.90 1.63%
GOOG $573.21 -0.08%
TSLA $202.43 1.40%

Markets

DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs