Overdraft Fee

The fee that is charged an account holder for a check that is paid or honored when the available balance in the account is not sufficient to cover the amount of the check. This is called an overdraft and represents an extension of credit. An overdraft fee may also be called a nonsufficient fund (NSF) fee. A NSF fee is charged when a check drawn on an account with insufficient funds is not honored by the paying institution. The NSF fee is a processing fee to your account because of the cost toreturn the check.