Cash reserve?

When I opened my checking account,the pamphlet metioned that I have a $10,000.00 cash reserve.What exactly does this mean? (I don%26#039;t have that kind of $$ in my acc.)

Cash reserve?mortgage lenders

You do need to apply for an overdraft (cash reserve) account. I will give you an example of how the cash reserve accounts work.

you write a check to buy groceries.....thursday night because you know you are getting paid on Friday. Let say you wrote the check for 75.00 and you only have 2.00 in your account. If this check for 75.00 hits the bank before your deposit gets in, you will bounce the check. The bank will send the check back to the grocery store and say not enough money in the bank (they call it NSF) and you will get charged a fee for writing a bad check (normally $25-35.00). If you have a cash reserve account the bank does not send the check back. They (you) borrow in incriments of 100.00 to cover outstanding checks. So in this example the 75.00 check comes in, you have 2.00, so the bank lends you 100.00. Your bank account shows 102.00 and they post the 75.00 check and you balance goes to 27.00. You will have to pay the bank back 100.00 + interest for every day you use that money. You have to tell them you want to payoff or make a payment on the cash reserve....you can not just make your deposit and think that this pays the cash reserve.

The idea for the cash reserve is to give you flexibility if you have to have money now when you know you have money coming, so no checks bounce and you save on NSF fees. The bank does it because they make interest on you. Use it wisely and pay it off at every chance.

Good luck!

Cash reserve?

loan

Are you sure it says you HAVE a cash reserve account of $10,000, or that you can APPLY for one that could be %26quot;up to $10,000%26quot;?

Normally, a %26quot;cash reserve%26quot; related to a checking account means an overdraft account - if your checking account runs dry, the bank will provide funds from the cash reserve to cover any shortfall.

But it%26#039;s highly unlikely that the bank gave you a $10,000 cash reserve automatically. You either applied for it or you misread the pamphlet, and the bank is saying you can apply for a cash reserve.