What’s Your Fallback: When You Accidentally Issue A Check That Exceeds The Balance In Your Account

by Vinaya HS on September 28, 2010

in Finance

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Suppose you issue a check. You later discover that there isn’t sufficient balance in your account to honor the check but the check has already come up for presentation. How would you plan ahead to mitigate this scenario?

The only option that I can think of is to avail an “overdraft” facility on your account. In the past, I’ve actively advocated against availing this facility, but if you’re mature with your finances, an overdraft could be a reasonable fallback mechanism.

Is there any other fallback mechanism that you can think of? Also, do you know if the overdraft facility can be restricted to be exercised only against checks and not at the ATM/PoS?




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{ 3 comments… read them below or add one }

herge September 28, 2010 at 9:17 PM

“if you’re mature with your finances” this wont happen in the first place

Jagbir September 29, 2010 at 8:24 AM

agree with above comment, even if you issued by mistake why don’t call the person/party and tell them to postpone a bit if possible? these days of netbanking, getting some amount from friend/relative for such rare incident should be quick. another thing, do bank activate ‘overdraft’ quickly enough that cheque will not bounce?

- Jagbir

Vinaya H S September 29, 2010 at 10:52 AM

@herge:

Guess I ought to clarify the term “mature.” :-) What I really wanted to say was “if you’re mature enough to use the overdraft facility only as a financial fallback and not as a daily convenience.”

@Jagbir:

Possible but subject to Murphy’s law. :-)

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