What can happen if you mismanage your checking account (NSF)?

• A. Overdraft processing and non-sufficient funds fees.
• B. Increased credit limit
• C. Lower interest rate on deposits
• D. Free checks for a year

Answer: (A)

NSF stands for non-sufficient funds, which happens when you spend more money than is in your checking account. If you mismanage your account, the bank may process an overdraft, charging an overdraft fee for letting the transaction go through. If the bank won’t cover the expense, the payment is returned unpaid and you’ll see an NSF (or returned-item) fee. Repeated overdrafts or NSF events can rack up fees, impact your ability to use your account smoothly, and may affect your relationship with the bank. The other options—increased credit limit, lower interest rate on deposits, or free checks for a year—don’t reflect consequences of NSF, and aren’t tied to mismanaging a checking account.