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Honour & Dishonour Fees FAQs

On 1 March 2021, RACQ Bank changed the way debit items such as direct debits and cheques are processed. When there are insufficient funds to cover a debit item, the item will be dishonoured and not paid. This means that instead of processing the payment and putting you in the position of having an informal overdraft, we will simply dishonour the payment. In this case, you’ll be charged a $1 Dishonour Fee, which will let you know that the payment wasn’t processed. Prior to 1 March 2021, RACQ Bank’s Dishonour Fee was $15.

For direct debits, you’ll need to contact the debit user to initiate your direct debit again, or pay by other means. For cheques, you can either write another cheque or choose an electronic form of payment.

Unfortunately, we cannot used uncleared funds to pay cheques or direct debits. Only funds that have been cleared are counted toward your account balance for payments of this kind.

You can avoid dishonour fees by keeping sufficient cleared funds in your account to cover any direct debits or cheques. We recommend setting your direct debits to occur the day after a regular income credit is due. We also recommend only writing cheques when you’re able to ensure the funds can remain available until the cheque is presented.

An Honour Fee is a fee charged by some Financial Institutions when a debit item such as a direct debit or a cheque is paid when there are insufficient funds to cover the debit item. The fee often is applicable to cover manual processing of the debit item.

On 1 March 2021, RACQ Bank changed the way debit items such as direct debits and cheques are processed. When there are insufficient funds to cover a debit item, the item will be dishonoured and not paid. As debit items will no longer be Honoured when there are insufficient funds to cover the value of the item, an honour fee is no longer applicable.

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Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, before deciding.