Non-sufficient Funds (NSF) Definition

When an account cannot provide adequate funds to satisfy a payment the situation is often called an NSF. The most common example of this is when someone tries to buy something using a check or a debit card, and the purchase price exceeds the available account balance. A debit card transaction would be refused at the point of sale, whereas a check would bounce.

Financial institutions charge fees for NSF transaction attempts, and many merchants charge their own additional fees. Most NSF checks are reported on the check writer’s credit history. Deliberately or knowingly writing an NSF check is a crime and is defined as fraud in many jurisdictions.