What is a Returned Item Fee?

While not having enough money in your account is never an enjoyable feeling, we break them down so you’re armed with the information you'll need to avoid these types of fees.

3 min read

A returned item fee, also known as non-sufficient funds or insufficient funds fee, is a charge that some banks leverage when there isn’t enough money in an account to pay for a transaction. The returned item fee is often referred to as a “bounced check” or “NSF check,” and can commonly occur when you pay with checks or use online automatic payments.

While “not having enough money in your account” isn’t an enjoyable topic for any of us, we’ll break it down so you’re armed with the information you need to avoid these types of fees. And, to give you a preview of the good news, N26 doesn’t charge returned item fees, so you can rest easy.

Can a returned item fee be waived?

Sometimes, yes, but it’s not necessarily an easy process and after going through all the effort, in many cases you still won’t get all of your money back. Some banks may offer a one-time fee waiver for customers who are first-time offenders or have a good history, but it is usually dependent on the bank and their specific situation.

How much are returned item fees?

The amount you have to pay for returned item fees varies depending on the bank you choose, but typically the charge will be anywhere from $20 - $40.

How can you avoid returned item fees?

Budgeting (the best way)

By far the best way to avoid a fee is to monitor your balance and to be proactive with budgeting. By creating a budget and keeping track of your spending, you can avoid trying to spend money you don’t have. N26 Spaces is a great tool for budgeting. Spaces helps you visualize your savings and track your progress for short- and long-term goals. You create your personalized Spaces with savings targets and can easily move money between your Spaces and your primary account. If you’re really serious about saving, you can even “lock” a Space to ensure you’re staying on track.

Overdraft protection

If transactions continue to be made when you don’t have enough money in your account to cover them, you could face serious returned item fees. You might be able to avoid these by setting up overdraft protection for your account if your financial institution gives you the option. This is often a voluntary program that links your checking account to a savings or credit account and can automatically transfer money to cover the insufficient funds.

However keep in mind that with overdraft protection, it is still possible to be charged transfer fees or other service fees, even when you are covering the funds with your own money.

What’s the difference between a returned item fee and an overdraft fee?

Although returned item fees and overdraft fees are terms often used interchangeably, a returned item fee occurs when the transaction is not approved, while with an overdraft fee, the transaction is approved but you may have to pay fees and interest on the money “loaned” to use the service.

How does N26 handle returned item fees?

If you find yourself low on funds, know that N26 does not charge insufficient funds fees. The payment will simply be declined, and you’ll have several easy ways to add more money to your account.

Besides not charging insufficient funds fees, N26 does not charge maintenance fees or require a minimum account balance. Without the burden of unexpected fees, you can experience banking that is fast, flexible, and transparent.


Open an N26 account directly from your phone and experience banking with no hidden fees. Yes, that’s right — no minimum account balance, no insufficient funds fee, no maintenance charges, and no foreign transaction fees when you shop using your N26 card internationally.

The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.

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