NSF check

An NSF check is a check that was not honored by the bank of the entity issuing the check, on the grounds that the entity's bank account does not contain sufficient funds. This situation may also arise when a bank account has been closed.

NSF is an acronym for "not sufficient funds."

The entity attempting to cash an NSF check may be charged a processing fee by its bank. The entity issuing an NSF check will certainly be charged a fee by its bank. An alternative situation is that the bank of the entity issuing the check will honor the check, and then charge an overdraft fee to the check issuer. In this latter case, the entity cashing the check will not be charged a processing fee by its bank, since the funds have cleared.

Similar Terms

An NSF check is also known as a bad check, bounced check, or dishonored check.