Yes. The bank may refuse to permit overdrafts at an ATM unless you opt-in to the overdraft service.
The bank must provide accounts with the same terms, conditions and features to consumers who affirmatively consent or opt in to the overdraft protection feature and to consumers who do not opt in, with the exception of the bank's overdraft service for ATM and one-time debit card transactions.
If the bank pays other types of overdraft transactions, such as the payment of a check that overdraws your account, the bank cannot refuse to pay such transactions because you withheld your consent or agreement to a fee for the payment of ATM and one-time debit card transactions.
Last Reviewed:April 2021
Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.
FAQs
If I don't agree, can the bank decline my ATM transaction? Yes. The bank may refuse to permit overdrafts at an ATM unless you opt-in to the overdraft service.
Why would a bank decline an overdraft? ›
2 Insufficient income or cash flow
If you have insufficient income or cash flow, you may not have enough money to cover your overdraft interest and fees, or to meet your other financial obligations. This can make you a less attractive borrower and increase the likelihood of overdraft rejection or reduction.
Can a bank reject an overdraft? ›
If you don't opt-in, you can't be charged a fee. However, your bank may refuse your purchase if it will overdraw your account. If you do opt-in for overdraft protection or coverage, then your bank may pay a debit card purchase or ATM transaction, even if the transaction overdraws your account.
Can an overdraft be declined? ›
One of two things will take place: The transaction will either be declined or it will go through and overdraft your account. If your bank declines the transaction, you may be charged a nonsufficient funds fee. If your bank lets the transaction go through, you may be charged an overdraft fee.
Why won't my bank let me overdraft? ›
If you have not opted in to ATM and debit card overdraft, debit card purchases and ATM withdrawals will generally be declined if your account doesn't have enough funds at the time you attempt the transaction.
What are the new overdraft rules? ›
Overdraft Protection Act of 2021
- the consumer's transaction may be declined if there are insufficient funds in the related account, and.
- the consumer will not be charged a fee if such transaction is declined.
Avoid making multiple applications: Like any form of credit, overdraft applications often require a credit check. If you are rejected for an overdraft but apply again, credit agencies may consider you financially unstable and desperate for cash, which is likely to lower your credit score.
Is there a limit on overdraft fees? ›
Federal laws do not specify maximum amounts for fees that banks can charge for overdrafts. These decisions are made by the bank. Banks are required to disclose any fees when the deposit account is established, and they are required to give you advance notice of any increase in a fee.
How many times does a bank allow you to overdraft? ›
The limit on overdraft fees varies by bank/credit union, but many cap it at four per day. Some banks offer overdraft protection, which can help you avoid fees each time your bank or credit union authorizes transactions greater than your available balance.
What bank lets you overdraft the most? ›
NerdWallet's Best Banks for Overdrafts 2024
- SoFi Checking and Savings: Best for Overdrafts.
- Ally Bank Spending Account: Best for Overdrafts.
- Chime Checking Account: Best for Overdrafts.
- Self-Help Credit Union Personal Checking: Best for Overdrafts.
- Alliant Credit Union High-Rate Checking: Best for Overdrafts.
If a bank or collection agency tries to sue you after the statute of limitations is up, you should seek legal help. The statute of limitations is often between 3 and 10 years and starts from your last payment date.
What bank allows you to overdraft immediately? ›
If you prefer to manage your finances online, consider opening an account with online banks that allow you to overdraft immediately, like the Chime Checking Account and the Ally Bank Spending Account.
How many times can I overdraft my account? ›
The limit on overdraft fees varies by bank/credit union, but many cap it at four per day. Some banks offer overdraft protection, which can help you avoid fees each time your bank or credit union authorizes transactions greater than your available balance.
