Your banking activity could include debits, credits or transfers, and, based on the way these activities post to your account, your available balance is impacted.
First, let's define the different types of transactions:
- Credits are deposits or transfers of money into your account.
- How they happen: Credits include cash or check deposits you make at the teller line or ATM, Automated Clearing House ("ACH") credits such as automated payroll deposits, and online banking transfers into your account from another account.
- Debits are withdrawals or transfers of money out of your account.
- How they happen: When you write a check, use your debit card to withdraw funds or make a purchase, or make online transfers out of your account such as a bill payment, we debit your account for the amount of the transaction.
Current and available balance
Next, it is important to understand the difference between what is listed as your current balance and your available balance. These are not always the same figures.
- Your available balance is the amount of money immediately available for withdrawal. This balance includes transactions that have posted to your account as well as any "pending" signature debit card transactions (i.e., when you press credit). Your available balance is reduced by the amount requested for authorization from the merchant and shows as “pending” until the merchant presents the transaction for settlement. At that time, your balances are reduced by the transaction amount. This typically takes one to three business days.
- Your current balance is the amount of money in your account after transactions have officially posted. These would include cleared checks as well as debit card transactions that have been finalized. Pending and memo posted transactions are not included.
Transaction posting order
Finally, you need to understand how we post transactions, and how our posting order can affect your account's available balance. Except for the processing of real-time transactions, including, but not limited to, wires, ACH, debit card, ATM withdrawal, internal funds transfers, bill pay, and assuming all deposit and withdrawal transactions below are made and received by us within the same business day, transactions currently post to your account in the following order:
- Credits in descending dollar amount.
- Bank initiated debits in descending dollar amount.
- Non-returnable debits in time stamp order (e.g., wires, ACH pre-fund transactions, debit card, ATM withdrawal, internal funds transfers, bill pay).
- Non-returnable debits not time stamped (e.g., “on us” cashed checks in check number order).
- Returnable debits. ACH debit (non pre-fund transactions) by PAR number then checks in check number order.
- Post-system generated transactions: service charges and fees.
Note: It may take up to three days for certain debit card purchases to be presented to First Horizon Bank from the retailer.
Please be aware that if your account's available balance is insufficient to cover a transaction, your item will be considered "NSF" (non-sufficient funds) or overdrawn, and we will either reject or return the transaction or pay according to our standard overdraft practices or if you authorized the bank to pay overdrafts on ATM and everyday debit card transactions. Most NSF items result in an NSF or overdraft fee to your account.
Even if your account becomes overdrawn during the day due to real-time processing, no overdraft fees will be charged if your account is returned to a positive balance by the end of the Business Day.
See below to view an account posting scenario and how it would impact account balance.
At the beginning of the day on May 3, John's checking account has an available balance of $457.
- At 8:30 a.m., he makes a $500 debit card purchase at a local retailer.
- John's available balance is now -$43.
- Later in the day at 2:00 p.m., he realizes that he did not have enough funds in his account to cover the morning purchase.
- John logs in to Digital Banking and transfers $50 from his savings account to his checking account which post immediately and adjusts his available balance to $7.
- John's $500 debit card purchase posts to his account that evening.
- John was not charged an overdraft fee because his available balance was positive at the end of the Business Day.
Note: In the example above, John has opted-in and authorized the bank to pay overdrafts for ATM and one-time debit card transactions, and no other transactions posted to his account on May 3. If he had not opted-in and authorized the bank to pay overdrafts for his ATM and one-time debit card transactions, the local retailer would have declined his $457 purchase.