Please help me with this scenario and tell me what would be the balance of the checking account because of the insufficient checks?
Sometimes the banking laws are stacked against the customer.
Let's say you have $700 in your checking account. You write checks in the amounts of $50, $50, $100, $100, $150, $200, and $650 and they all hit your bank on the same day. The six smaller checks, in total, are less than $700, How many overdraft fees will you incur?
The banking laws dictate that checks are processed in descending amount order. So, the first check would be the $650 check would leave $50 to cover the rest. The $200 dollar check would be the next check and it would drain your account and impose an insufficient funds fee. Then the five remaining checks would also be charged insufficient fund fees.
If the checks were presented from smallest to largest, only the $650 check would cause an insufficient funds fee.