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[SPOILER ALERT: Academy Bank charges some of the highest overdraft fees in the country! Here’s how to avoid them.]
It’s your friend’s birthday and you’d love to treat them to a hearty meal, a couple of ice cream cones, and a round of drinks later. You have a great night out, you love the time spent catching up and all you had to so was swipe your Academy Bank debit card to cover for the expenses.
It’s the following morning and boom! Your Academy Bank statement reveals that your account is overdrawn and that your night on the town cost you an extra $60 in overdraft fees!.
If you’re an Academy Bank customer, you’ll want to know what fees your account may be subject to, how the bank sets your overdraft limit, and what steps you can take to reduce or eliminate costly fees, while still getting the cash you need.
Kansas City-based Academy Bank is a community bank with over $1 billion in assets. This smaller bank has gained notoriety for powering its finances with overdraft fees, which account for more than double the bank’s total profits. (Only one bank in America, First Convenience, had a larger ratio of overdraft fee revenue to profits in a 2020 study!)
Both Academy Bank and Armed Forces Bank are subsidiaries of Dickinson Financial Corporation. The banks operate separately but have similar overdraft policies. You can learn more about Armed Forces Bank overdraft limit and fees here.
Why have 14 million people ditched their high-fee bank for Chime?
What is Academy Bank’s overdraft policy?
An overdraft is a small loan that your bank provides to you to cover transactions when your account balance drops below zero. If the bank decides to process the transaction, you will be often charged an overdraft fee. The fee can be significantly larger than the amount of smaller transactions!
You can choose among three options for how Academy Bank will handle overdraft transactions.
All accounts will be defaulted into Academy Bank’s standard overdraft practices. Under this policy, checks, bill payments and recurring transactions may be paid at the bank’s discretion and you will be charged an overdraft fee. If an item isn’t paid, it will be returned, and you will still be charged a fee. Academy Bank will decline ATM withdrawals and debit card transactions, so you will be unable to use your debit card. There is no overdraft fee but you may be subject to a $0.50 declined ATM transaction fee.
If you would like to continue to access your account at an ATM or for debit card purchases when it is overdrawn, you will need to authorize Academy Bank to approve these transactions (at the bank’s discretion) via this form. You will be a charged an overdraft fee for each transaction.
If you do not want the bank to process any transactions that would overdraw your account, you can opt-out. You won’t incur any overdraft fees, but returned checks and other transactions will still be subject to an insufficient funds fee.
If you have a savings account with Academy Bank, you can avoid overdraft fees by linking it to your checking account via the bank’s Overdraft Protection Transfers program. If a checking account transaction will bring your balance below $0, the bank will automatically transfer funds from your linked account to your checking account. Transfers are made in $100 increments (so a $5 overdraft will cause $100 to be transferred). If you have less than $100 in your linked account, the entire balance will be transferred and you will still be subject to overdraft fees if the amount is not sufficient to cover all of your transactions. There is no transfer fee.
How much are Academy Bank’s overdraft fees?
Academy Bank charges $20 per overdraft. You are subject to fees on up to five overdraft transactions per day, for a total cost of up to $100 per day. There are no fees on transactions under $5. Unlike a growing number of banks, like PNC, there is no grace period to bring your account balance back above zero to avoid fees.
Academy Bank’s insufficient funds fee, charged when an item is returned unpaid, is $20.
WAIT! High overdraft fees aren't the only way Academy Bank is costing you money.
With inflation overheating, you've probably heard that interest rates are climbing sharply. That means that for the first time in years, it's a great time to shop around for a high interest savings account.
Academy Bank savings accounts currently pay just 0.03% APY1 as of 11/22/2022. That means that if you have $2,500 in a savings account, you'd earn just $0.75 after one year! Move those hard-earned savings to an FDIC-insured bank paying 3.50% APY and you'd earn $87.49 after one year, and some banks now pay even higher rates!
Don't let your hard-earned savings sit there doing next to nothing. Check out the rates that you can earn at other banks:
What is Academy Bank’s overdraft limit?
Academy Bank approves overdraft transactions on a case by case basis, and your overdraft limit may vary on a daily basis. Unfortunately, Academy Bank does not disclose overdraft limits to customers, so it can be a stressful guessing game as to whether that debit card purchase will be approved or declined.
Your overdraft limit is based on a number of factors, including your account history, average balance, recurring deposits, and other factors. The bank will also look at the size and type of the transaction; large or unusual transactions are less likely to be approved.
When you open a new account with Academy Bank, it is not eligible for overdrafts for the first 30 days. Your overdraft limit may be reduced or eliminated if you have an excessive number of overdraft transactions or make a deposit to bring your balance back above zero in a timely manner.
How to avoid overdraft fees from Academy Bank
Discovering you’ve just paid Academy Bank $100 in overdraft fees can be a painful jolt! The good news is there are some tools to help you reduce or eliminate costly overdraft fees.
- Know your balance. You can set up low balance alerts through Academy Bank digital banking so you’re aware of when that next purchase may push your balance into the red.
- Set the overdraft policy that best fits your finances. You can instruct Academy Bank to pay for all, some, or none of your overdrafts. Limiting your ability to overdraft at an ATM or on your debit card can be inconvenient, but can be easy way to avoid high-fee spending mistakes.
- Link your savings account. Academy Bank’s Overdraft Transfer Policy will automatically move money to your checking account when the balance turns negative so you can avoid overdraft fees.
- Consider a new bank with a friendlier overdraft policy. Chime offers no-fee overdrafts for up to $200.
- Explore cash advance apps. Forget about those high cost payday loans that can trap you in a dangerous cycle of debt. A new breed of instant loan apps charges no interest, modest fees and can get you cash in minutes with no credit check.
- Beem Cash Advance App Review – Big Promises, Questionable Practices - September 29, 2023
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- Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month and Visa debit card activation. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member's Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime's discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won't cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See terms and conditions.
- Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.