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Resources/FAQs

What Is Non-Sufficient Funds?

"Non-sufficient funds" (NSF) is a term used by banks and financial organizations to signify that there are not enough funds in a bank account to honor an attempted transaction. Checks that result in an NSF notice are informally known as "bad" or "bounced checks."

NSF Penalties

An NSF transaction can result in a number of penalties, both from your banking institution and the check recipient. Depending on your bank's policies and your account preferences, sometimes a bank will honor a bad check (sparing you the various returned-check penalties they could incur from the vendor). Still, this often results in costly overdraft fees and restrictions applied to your account.

If you receive an NSF notice unexpectedly, reach out to the vendor immediately to reconcile any pending payments. You should also check your account history to make sure the NSF notice wasn't sent in error, and then contact your bank. It is especially important to make sure you're aware of any bank or vendor penalties or holds on your account so that you can avoid a potential waterfall-effect of faulty transactions.

In general, one NSF transaction or overdraft won't damage your credit, but repeated slip-ups can eventually affect your financial standing.

Avoiding NSF Penalties

Because debit and credit card transactions take place almost instantly (and a charge can be declined immediately and without penalty), most NSF notices are the result of either scheduled transactions or checks.

The best way to avoid non-sufficient funds incidents completely is to keep close track of your budget, your bank account balance, and any checks you've written until you see them post to your account. It is also a good idea to set up a back-up plan with your bank in case of an overdraft. For example, you can have your bank accounts set up so that any overdrafts from your checking account are automatically covered by a savings account.

Because NSF practices and policies vary from bank to bank, and even from account to account, make sure you know the overdraft and NSF policies whenever setting up an account.

Columbia Bank is up-front with all of our overdraft policies and any related fees for all of our bank accounts. And with Columbia Bank's online and mobile banking services, you can access your account information at any time, from anywhere to avoid NSF notices altogether. Contact Columbia Bank to discuss specifics about any of our checking, savings, or business banking accounts.