NSF fee.

In plain English

NSF stands for non-sufficient funds. An NSF fee is charged when you try to make a payment, such as a check or an automatic debit, and your account balance is too low to cover it, so the bank declines and returns the payment unpaid. This is different from an overdraft: with an overdraft the bank pays the item anyway and charges you, while with an NSF the item bounces and goes unpaid. A bounced payment can hurt twice, because the company you were paying may also charge you a returned-payment or late fee. Many banks have reduced or dropped NSF fees in recent years, but practices vary by institution.

01Why it matters

A single bounced payment can stack a bank NSF fee on top of a merchant's returned-payment fee and a possible late fee, turning a small shortfall into a much bigger, fast-moving cost.

02The math, step by step

You have $40 in checking and a $60 autopay hits. If your bank does not cover it, the payment is returned unpaid and you are charged an NSF fee (banks set their own, historically around $30 to $35 where charged, as an illustration only). Your first step is to check your bank's fee policy and ask whether the fee can be waived, since many banks now reduce or refund these.

03What this is NOT