When a withdrawal or pre-authorized debit is made but there aren't enough funds in your bank account to cover it, the bank will charge a Non-Sufficient Funds (NSF) fee. This may appear on your bank statement as "NSF" or "RTN NSF."
The Finance Department estimates that 34% of Canadians were charged an NSF fee in 2023. At $30-$60 per instance – NSF fees are really costing Canadians. But there is an end in sight. As of March 12, 2026, NSF fees will be limited to $10.
But in the meantime, here’s everything you need to know about NSF fees and how to avoid them.
Key Takeaways
- Non-sufficient fund fees (or NSF fees) are charged when you try to withdraw more money than you have in your account.
- These fees are usually around $30 to $60 depending on your bank.
- According to an order-in-council, NSF fees will be limited to $10 as of March 12th, 2026
- Giving yourself some buffer, changing your spending habits, or getting overdraft protection are a few ways to avoid being charged for these fees.
When are you charged an NSF fee?
NSF fees are triggered when there isn’t enough money in a bank account to cover a transaction. For example:
- A pre-authorized debit
- Cashing a personal cheque
- Sending an electronic funds transfer
Here’s a real-life example of how costly a single NSF can be: If you have $10 in your chequing account and a streaming subscription (a pre-authorized debit) renews, you’ll be charged an NSF fee by your bank along with a potential late fee by the streaming service.
How much do NSF fees cost?
The exact amount depends on your bank. But they’re usually between $30 to $60. In short – not cheap. NSF fees should be avoided whenever possible.
But, NSF fees will be limited to $10 in 2026
According to an order-in-council dated two days before Justin Trudeau left office (March 12th), NSF fees will be limited to $10 as of March 12, 2026.
A few other things to know about this change (besides the fact that it will save Canadians a lot of money):
- Banks will also be prohibited from charging NSF fees more than once within a two-business-day period or when the overdraft is less than $10.
- Banks will be required to send an alert to account holders at least three hours before a payment exceeds their available balance. If the account holder deposits enough funds to cover the payment within that time, the bank cannot charge the fee.
How to avoid NSF fees: 6 tips
Whether an NSF charge is $60 or $10, it’s nice to keep that money in your pocket and not lose it to an annoying fee. Here's a look at 6 different tips for avoiding NSF fees:
- Use a bank account that covers NSF fees
- Keep a financial buffer
- Reassess your budget
- Set reminders
- Get overdraft protection
- Use a prepaid card
1. Choose a bank account that covers NSF fees
Some bank accounts provide overdraft protection for free, and this usually covers NSF fees as well. Of course, these are typically the more premium accounts and aren't especially common in Canada.
2. Keep a buffer in your account
The simplest way to avoid NSF fees is by keeping a small buffer of extra funds in your chequing account. This is particularly important if you have recurring payments set up. Staying on top of your finances – meaning having a general idea of your current balance and anticipating future expenses before your next paycheque – helps ensure you won’t be caught off guard by unexpected bank fees.
3. Reassess your budget
While keeping a buffer is a smart strategy, it’s not always easy for everyone. No one wants to face an empty bank account, especially when hit with a $40+ NSF fee on top. If you're struggling with this, it’s a good idea to review your budget regularly to identify areas where you can cut back or make changes. This helps you distinguish between "wants" and "needs," allowing you to adjust your spending and avoid running into NSF fees.
4. Set up bank reminders
Some banks, budgeting, and/or various money apps and tools let you set up notifications when your account hits a certain balance and reminders for when a bill payment is coming up.
Possible alerts include:
- Low balance
- Direct deposit
- Unusual activity
- Large purchase
- Large withdrawal
- Debit card purchase
- Upcoming payment
- Fees charged
- New statement available
Setting up one or more of these can be a big help and allow you to remain aware of your finances.
5. Get overdraft protection
Most bank accounts offer overdraft protection services, either as an additional monthly fee or on a pay-to-use basis. This can help your bank accept payments even if they do go over your account balance, putting your account in overdraft instead of simply returning the payment.
For most banks, it's about $5 per month or per use, but it also includes an interest rate for the amount of time your account is in the negative. Some banks, such as TD or BMO, also offer an option to automatically transfer funds from another account to cover the overdrawn amount.
6. Use a prepaid card instead
To avoid going through your bank, try using a prepaid credit card instead. These cards work well because you can't spend more than you load onto the card, nor can you set up pre-authorized debits with it.
How to get an NSF fee refund
If you woke up this morning and found an NSF fee on your statement, you may be able to call your bank and request a refund, especially if this is your first time. The worst they can do is say no, and most banks will want to keep you on as a client, especially if you have a decent history with them.
Here are some pointers you'll want to keep in mind when making that call:
- Be kind: Being courteous goes a long way in life. Yelling at your customer service representative (who, really, has very little responsibility or control here) won't improve your chances of getting a refund.
- Stress how good of a client you are: If this is the first time this happened and you have a trouble-free history, be sure to let them know. Showing them that this was a one-off that won't be repeated again will increase the chances of you getting the NSF fee waived.
- Ask if there's anything else they can do: Even if they can't reimburse you for the NSF fee, maybe there's something else they can do for you – waiving a month of account fees, for example. It certainly doesn't hurt to ask what they can do, so be persistent and kind.
What are the differences between NSF fees and overdraft fees?
The main difference between non-sufficient funds fees and overdraft fees is that an NSF fee is charged when your payment is refused, while an overdraft fee is charged when the payment is accepted and your account goes negative.
Both NSF fees and overdraft fees occur when you try to make a payment that goes over your account balance. However, they can’t be charged at the same time.
You can get overdraft protection, which means your bank may accept the payment and put your account into overdraft status instead. That said, they may still deny the payment and charge you an NSF fee, despite your protection.
Here's a quick summary of the differences between NSF and overdraft fees:
| Type of fee | Fee amount | Payment status | Account status |
|---|---|---|---|
| NSF fees | $30 - $65 | Refused (which may result in more fees) | Overdrawn, with possible NSF fee |
| Overdraft fees | Usually $5 per month, plus interest on the balance until you bring it back above $0 | Approved | In the negative (called "in overdraft") |
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$25 GeniusCash + Delicious meal choices with fresh ingredients + Front-door delivery.Can an overdrawn account impact your credit?
If your account is overdrawn or you are charged an NSF fee, your credit will not be affected if such an occurrence is an isolated incident – bringing your account back above $0 will ensure no harm to your credit score.
However, carrying a negative balance for a prolonged period, or routinely missing payments, will negatively impact your credit score.
NSF fees by Canadian bank
Each bank sets its own NSF fees, but most Canadian banks charge $45. When looking at all banks, though, these fees range from $0 to $65.
Here are what NSF fees look like at each major Canadian bank:
Note: This table was last checked and updated on March 19, 2025. You should always check with your own financial institution to ensure you have the most up-to-date information.
The highest NSF fees in Canada belong to Laurentian Bank at a whopping $65, which is $20 more than most other banks. On the other hand, the lowest NSF fees belong to EQ Bank, which doesn’t charge at all.
FAQ
What's an NSF fee?
NSF stands for non-sufficient funds and refers to a specific type of bank fee. You're charged an NSF fee when the bank cancels a payment because you don't have enough funds in your account to cover the full amount.
How much is an NSF fee?
The amount you're charged for not having enough funds depends on your bank, but most banks in Canada charge $45. NSF fees will be limited to $10 on March 12, 2026.
Are there banks that don't charge NSF fees?
The only Canadian bank we're aware of that doesn't charge NSF fees is EQ Bank. EQ is an online-only bank that offers a variety of excellent financial products.
Is an NSF fee the same as an overdraft fee?
No, NSF fees occur when you have insufficient funds to complete a transaction, so the bank denies your payment and charges a fee. Overdraft fees occur when too much money is withdrawn from your account, resulting in a negative balance.
Can I get an NSF fee refunded?
It's best to avoid being charged NSF fees since there's no guaranteed way to get it refunded. It can't hurt to call your bank and ask, though, especially if your account is in good standing and this hasn't happened before.
Will an NSF fee go on my credit report?
No, being hit with an NSF fee does not have an adverse effect on your credit score. However, any missed payments because the transfer was rejected could have a negative impact, so monitoring your credit history is a good idea.
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