BANKING AFFAIRS

Detailed explanation-1: -When payment cannot be completed it is often considered as “bounced.” If a bank receives a check written on an account with insufficient funds, the bank can refuse payment and charge the account holder an NSF fee. Additionally, a penalty or fee may be charged by the merchant for the returned check.

Detailed explanation-2: -An NSF fee is commonly charged by banks when an account lacks the funds needed to cover a transaction, and the bank does not allow the transaction to go through. The result may be in the form of bounced checks or denied electronic bill payments.

Detailed explanation-3: -How much are NSF fees? In the U.S., the average fee for overdrawing an account is around $30, according to the FDIC. But fees can range from about $10 to nearly $40, depending on your bank and its policies.

Detailed explanation-4: -Some banks charge a maintenance (or monthly) fee if you go below a certain balance in your account. Banks may charge these fees to encourage deposits or certain balances. This helps banks guarantee you’ll either have a certain amount in your account or you’ll be paying a fee.

Detailed explanation-5: -Insufficient Funds Fees Account holders can avoid such fees by linking another account, such as a credit card or a savings account, as a backup source of funds.