An Honour Fee is a fee charged by some Financial Institutions when a debit item such as a direct debit or a cheque is paid when there are insufficient funds to cover the debit item. The fee often is applicable to cover manual processing of the debit item.
On 1 March 2021, RACQ Bank changed the way debit items such as direct debits and cheques are processed. When there are insufficient funds to cover a debit item, the item will be dishonoured and not paid. As debit items will no longer be Honoured when there are insufficient funds to cover the value of the item, an honour fee is no longer applicable.