Sufficient Funds Definition | Law Insider (2024)

FAQs

What is the meaning of sufficient funds? ›

Sufficient funds means that the funds at issue have been delivered for deposit to the financial institution at which such account is maintained and not that such funds are available for withdrawal in accordance with the deposit rules or the funds availability policies of such financial institution.

(səfɪʃənt ) adjective [oft ADJECTIVE to-infinitive, ADJ n to-inf] If something is sufficient for a particular purpose, there is enough of it for the purpose.

What is Sufficiency of Funds? In this section, the Buyer provides information regarding its ability to fund the acquisition. It is part of the Representations and Warranties of Buyer section. The Representations and Warranties of Buyer portion of the Agreement is used to save the Seller time and money.

What Does It Mean to Have Insufficient Funds? Insufficient funds in a bank account mean the account holder does not have enough money to cover a check, direct debit, or other withdrawal. This can be caused by either needing more money in the account or too many outstanding transactions that need to be paid.

A bank statement, security statement, or custody statement usually qualify as proof of funds. Proof of funds is typically required for a large transaction, such as the purchase of a house.

Non-sufficient funds, or insufficient funds, is a banking term used to indicate that the checking account does not have sufficient balance to cover a transaction or payment. Colloquially, NSF checks are also called “bounced” or “dishonored” checks.

Legal Definition

sufficient. adjective. suf·​fi·​cient. : enough to meet the needs under the law of a situation or a proposed end.

: having or providing as much as is needed : enough. A brisk walk is sufficient to raise your heart rate. A 15 percent tip is sufficient. [=adequate] There must be sufficient funds in your bank account to cover the check.

Some common synonyms of sufficient are adequate, competent, and enough. While all these words mean "being what is necessary or desirable," sufficient suggests a close meeting of a need.

Example of Not Sufficient Funds

He believes he has $250 in his checking account. However, he forgot about an automatic payment of $100 that was scheduled to come out of his account. As a result, when Alice goes to deposit the check, Bob's account only has $150, not enough to cover the $200 check he wrote to Alice.

What does adequately funded mean? ›

adjective [oft ADJECTIVE to-infinitive] If something is adequate, there is enough of it or it is good enough to be used or accepted.

The NSF check is not reflected in the bank balance and the company needs to reduce the balance per bank for the NSF check since it doesn't represent a valid payment. For example, if you write a check for $100, and your bank account only has $75, then the check will bounce when the company goes to deposit it!

Something adequate is sufficient, and something inadequate is insufficient (in- meaning "not"). If you have $100 in the bank and you try to use a debit card for a $102 purchase, even though you're close to having enough, your funds are insufficient to cover the sale.

Bad or bounced check cases can be charged as a misdemeanor or felony depending upon the dollar amount of the check involved or the prior criminal record of the offender for similar crimes. Offenses punishable by more than 1 year in jail are classified as felonies.

“Insufficient funds” is a checking account status where the balance is deficient. It is a banking term that may appear as a notice in bank statements or receipts. The insufficient funds status describes the scenario where a checking account does not hold sufficient funds to cover transactions.

Your bank will charge a nonsufficient funds or NSF fee if you lack funds to pay for a check, transaction or payment. Chanelle Bessette is a personal finance writer at NerdWallet covering banking. She previously worked at Fortune, Forbes and the Reno Gazette-Journal.