The term non-sufficient funds (NSF), also known as insufficient funds, refers to a situation in which you do not have enough money to cover an expense. You may receive a notice of “non-sufficient funds” or “insufficient funds” on a bank statement, ATM terminal, or on a receipt when your bank balance isn’t high enough to cover a pending transaction.
NSF also describes fees charged by banks and lending institutions when a cheque or other payment is presented but cannot be covered by the balance in your account. NSF cheques are referred to as “bounced” cheques. If a bank or lender receives an NSF cheque, they can refuse the payment and charge the account holder with a fee.