What Happens When Checks Bounce?
The Inconvenience While everyone hopes to avoid the hassle and embarrassment of a bounced check, it will probably happen to nearly everyone at least once. Often, an account holder will have to wait for the bank to decide what to do before knowing how to proceed. Some banks have set policies, and some treat checks with insufficient funds on an individual basis. If the bank honors a check, the customer will likely have other fees to pay, but this will usually be the case no matter what. Receiving Bank Sometimes, the bank will honor the check, charge a fee to the account holder for having an overdraft, and the payee will receive the money as usual without ever learning of the situation. In other cases, the receiving bank will inform the submitting bank that the check will not be honored. If this happens, a fee could also be charged to the customer who wrote the check. Overdraft Protection Some customers may have overdraft protection on their accounts, which is a substantially cheaper opti
