NSF fee (non-sufficient funds fee)

What it means

An NSF fee is charged when a bank declines a cheque, pre-authorized debit, or bill payment because the account doesn't have enough money to cover it. As of March 12, 2026, federally regulated banks and credit unions in Canada are limited to charging a maximum of $10 per NSF occurrence, can't charge more than once within a 2-business-day period on the same account, and can't charge one at all if the shortfall is under $10 — down from a typical $45–$48 per fee before the cap.

Why it matters

NSF fees have historically hit people living paycheque to paycheque hardest, and the same missed payment could sometimes trigger more than one fee if a merchant automatically retried a failed charge.

Common misunderstandings

• •A single missed bill can't rack up unlimited fees anymore — the 2-business-day cap on repeat charges to the same account exists specifically to prevent that.
• •The $10 cap applies to personal deposit accounts at federally regulated institutions; business and corporate accounts aren't covered.

Where you'll see it

On a bank statement after a payment bounces, and in the fine print of pre-authorized debit agreements with landlords, gyms, and subscription services.