What occurs when a check is written without sufficient funds in the checking account?

When a check is written without sufficient funds in the checking account, it results in what is commonly referred to as a bounced check. This term indicates that the financial institution is unable to process the check due to insufficient funds to cover the amount written. When this happens, the check is returned to the payee, and the person who wrote the check may incur an additional penalty from their bank as well as potential fees to the payee for having the check returned.

This situation emphasizes the importance of maintaining adequate funds in a checking account to avoid overdrafts or bounced checks, which can lead to negative financial consequences, such as damaged credit scores or disrupted business relationships.

Other terms in the list refer to different scenarios. A floating check is written with the expectation that funds will be deposited before it is cashed, a postdated check is one that is dated for a future date, and outstanding checks are checks that have been written but not yet cleared by the bank.