"Insufficient funds" refers to a situation where a bank account does not have enough money to cover a transaction, such as a check or debit card purchase. When this occurs, the bank may decline the transaction, leading to fees or penalties for the account holder. This term is commonly associated with banking and personal finance. It serves as a warning to individuals to monitor their account balances and manage their spending to avoid overdrafts or bounced checks, which can negatively impact their credit score and financial stability.