Question 3

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When you don’t have enough money in your account to cover a check you’ve written, the bank may decline to pay and send the check back to you stamped “non-sufficient funds”, or NSF. That’s called a returned item, or a bad or bounced check.

If I pay a business by check for more than my balance will the bank pay the business?

Maybe yes, maybe no.

Yes, if it’s the first time you’ve done it.

No, never.

Only on legal holidays.

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If the bank allows the check to overdraft it will pay the store. You’ll have to immediately repay the bank that amount plus a fee. If the bank doesn’t pay, the check will be returned to the store “insufficient funds.” You’ll owe the store the check amount, a bank fee, and possibly a store fee.

Whether your bank pays the check or not, they will most likely charge you a fee. Sometimes the business to whom you wrote the check will charge you too!

For more information on Overdraft Regulations, please visit www.federalreserve.gov/consumerinfo/wyntk_overdraft.htm.

It’s your money Keys to keeping track How to use your transaction register How to read your statement How to reconcile your account Avoid overdrafts! Question 1 Question 2 Question 3 Question 4 Question 5 Mackenzie at the mall