What a non-sufficient funds fee is, how it differs from an overdraft fee, and what to check and ask so a returned payment does not cost you twice.
A non-sufficient funds fee, or NSF fee, may be charged when your institution returns a payment unpaid because your account did not have the money to cover it. The check bounces or the automatic payment fails, and depending on its policy, your institution may still charge you.
Not paid, and you can still be charged.
Illustrative amountsIllustrative amounts, not any institution's prices. With $40 in checking, a $60 payment is attempted and your bank returns it unpaid. Your bank may charge a $35 NSF fee, and the biller may add $20 of its own: $55 in fees, and you still owe the $60 bill.
A returned payment can bring an NSF fee and a biller's fee, and you still owe the bill.
That surprises people. With an overdraft, the institution pays the transaction and charges a fee, so the payment at least went through. With an NSF fee, the payment fails and you can still be charged.
The national median NSF fee is $30.00, across 2,857 institutions with a published schedule on file. The middle half of institutions publish $25.00 to $32.00, and the highest recorded is $53.00.
| Fee | Institutions |
|---|---|
| $0 to under $5 | 69 |
| $5 to under $10 | 27 |
| $10 to under $15 | 108 |
| $15 to under $20 | 133 |
| $20 to under $25 | 231 |
| $25 to under $30 | 752 |
| $30 to under $35 | 1030 |
| $35 to under $40 | 472 |
| $40 and up | 35 |
69 institutions list a $0 NSF fee on their published schedule. A $0 line can apply to one account only, so check the account you hold or plan to open.
90 institutions publish a daily limit in dollars. A limit can cover NSF fees, overdraft fees or both, so ask what yours covers.
What the daily limit figure covers. 90 institutions publish a daily limit in dollars. They apply it 40 to overdraft fees only, 17 to NSF fees only, 26 to both combined, 7 without saying which. A limit stated as a number of fees per day is not in this figure.
A returned payment can be presented again, and each presentment may draw another fee where the policy allows it. Ask whether yours charges for a re-presented item.
One payment, three outcomes. You have $40 in checking and a $60 bill arrives.
The two fees are often the same amount, which is why the difference gets lost. It matters because an NSF fee leaves the bill unpaid: the payment still has to be made, often with a late fee from the other side. That is how a returned payment can end up costing more than an overdraft of the same amount.
Which one you get is often not your choice. Whether an institution pays or returns a payment depends on its policy, your account history and the payment type, and you are usually not told in advance.
Credit unions follow the same requirements under the NCUA's Truth in Savings rule, Part 707. 12 CFR 707.11
NSF fees on instantly declined payments
If the same payment was returned several times and drew several fees, dispute it with your institution. If that fails, you can submit a complaint to the CFPB at consumerfinance.gov/complaint.
| If your bank charges | Where that puts you |
|---|---|
| No NSF fee listed | Check that it covers your account |
| $25.00 or less | In the lowest-priced quarter |
| Around $30.00 | Right at the national median |
| More than $32.00 | In the highest-priced quarter |
Then find the daily limit and the returned deposited item fee. A median NSF fee with no daily limit, plus a charge when someone else's check to you bounces, costs more than the headline number suggests.
Check your own bank
Find your bank or credit union and see its published NSF / returned item against the national median.
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