What happens if my account does not have sufficient funds to cover a bill payment item? | First Internet Bank (2024)

FAQs

What happens if my account does not have sufficient funds to cover a bill payment item? | First Internet Bank? ›

If your account does not contain sufficient funds to cover the payment, any overdraft protection you may have on the account will be used. If you still do not have enough funds to cover the payment(s), you will be charged a fee for insufficient funds (NSF).

What happens if I don't have enough money in my checking account to cover a bill? Just as with a paper check, it's important to maintain sufficient funds in the account to cover all payments. Please note that you may be charged a non-sufficient funds (NSF) fee for payments returned for insufficient funds.

Insufficient funds

If you write a check for $1,500, but you have only $1,000 in the bank, it will bounce when the payee tries to cash it because you don't have enough funds to cover the amount written on the check. You'll probably pay a penalty fee to your bank for writing a rubber check.

Insufficient funds can lead to insufficient fund penalty/fees if the bank refuses the payment or overdraft fees if the bank accepts the transaction and overdraws the account. Insufficient funds may result in legal issues, including criminal charges.

Key Takeaways. An overdraft occurs when an account lacks the funds to cover a withdrawal, but the bank allows the transaction to go through anyway. The overdraft allows the customer to continue paying bills even when there is insufficient money. Many banks impose additional fees or penalties for overdrawn accounts.

If a payment takes you into any arranged overdraft, you have until the end of the day to pay money into your account to avoid daily arranged overdraft interest for that day.

ATM & Debit Card Overdraft Coverage: You make the choice

If you say 'yes' to ATM & Debit Card Overdraft Coverage, the following transactions may be paid (at the bank's discretion) and you may be charged an Overdraft Paid Fee: ATM withdrawals. Everyday debit card transactions.

If you do opt-in for overdraft protection or coverage, then your bank may pay a debit card purchase or ATM transaction, even if the transaction overdraws your account. You will be charged any overdraft fees that are incurred as a result.

Writing a check against an account with insufficient funds is considered a fraud and creates an inference that the party knew that the account had insufficient funds and intended to defraud or cheat someone.

Key takeaways. An overdraft fee may be charged by a bank when it temporarily covers transactions that overdraw your account, allowing one or more to clear. An NSF fee is what some banks impose when they decline payments or the cashing of checks that would bring the account to a negative balance.

What happens if I don't have overdraft protection? ›

If your checking account is not enrolled in Debit Card Overdraft Service and you don't have enough available money in your checking account or in accounts linked for Overdraft Protection, ATM and everyday (one-time) debit card transactions will be declined at the time of the transaction.

Your bank may offer overdraft coverage for debit and ATM transactions, but you don't have to accept it. If you don't opt in to overdraft coverage, ATM and debit card transactions will be declined by your bank if there's not enough money in your account to cover them, and you won't be charged a fee.

Many banks provide some form of overdraft service as a standard practice so that your checks do not bounce and your electronic bill-pay transactions go through. You will owe an overdraft fee to the bank for each overdrawn item the bank pays at its discretion.

When you open a checking account, you may want to ask a representative, “What's the most I can overdraft my account?” and “How much overdraft can I get? Each financial institution sets different limits which can range from $100 to $1000.

How long do banks give you to pay overdraft fees before closing your account? Usually 30 days. Banks don't like you to overdraft your account, that's why they charge high fees.

Even if you know you have poor credit, you could still be accepted for an overdraft with bad credit. Whether this is finding out your chances of being accepted for a new account, or adding an arranged overdraft to a current account, they can perform a soft search called an overdraft eligibility checker.

If your account does not contain sufficient funds to cover the payment, any overdraft protection you may have on the account will be used. If you still do not have enough funds to cover the payment(s), you will be charged a fee for insufficient funds (NSF).

Missing bill payments can have a negative financial impact, the severity of which can depend on the type of bill involved. From least to most serious, the kinds of consequences you may experience can include: Late fees. Phone, internet, or utility service disconnects or disruptions.

Most traditional banks require you to maintain a minimum account balance to avoid monthly service charges. These typically range from $100 to $2,500, though most are much closer to the lower end.