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When you write a check, you effectively promise the payee that you have enough money in your account to cover its amount. The bank will "bounce" the check if you write a bad one because there are insufficient funds in your account to cover it. It will decline to pay the amount.
Non-sufficient funds, or insufficient funds, is a banking term used to indicate that the checking account does not have sufficient balance to cover a transaction or payment. Colloquially, NSF checks are also called ?bounced? or ?dishonored? checks.
A bounced check is slang for a check that cannot be processed because the account holder has non-sufficient funds (NSF) available for use. Banks return, or ?bounce,? these checks, also known as rubber checks, rather than honor them, and banks charge the check writers NSF fees.
Writing a check against an account with insufficient funds will always result in a bounced check and incur a fee. In fact, people who knowingly write a check against an account with insufficient funds may be committing a crime.
Under California Penal Code Section 476a, the crime of writing a bad check while aware of insufficient funds with intent to defraud is punishable as a misdemeanor if the total amount of the checks written does not exceed $950.
Knowingly writing a bad check is an act of fraud and it's punishable by law. Criminal penalties for people who tender checks knowing that there are insufficient funds in their accounts can vary by state. Some states require an intent to commit fraud.
Overdraft protection is an agreement with the bank or financial institution to cover overdrafts on a checking account. This service typically involves a fee and is generally limited to a preset maximum amount.
Section 97-19-55 - Bad checks, electronically converted checks or electronic commercial debits and insufficient funds (1) It shall be unlawful for any person with fraudulent intent: (a) To make, draw, issue, utter, deliver, or authorize any check, draft, electronically converted check, or electronic commercial debit to ...