How Soon Can I Use My Overdraft? (Right Away at These Banks…)

How Soon Can I Use My Overdraft?

When you can overdraft your account will depend on which bank you use and your overdraft settings. Typically, if your bank allows overdrafts and you consent to allow them (and accept the associated fees), overdraft features are available as soon as the account is open, active, and funded. Opening and funding a checking account can take anywhere from one to 10 business days.

Opening and Funding a New Account

If you apply for a new account in person at a bank branch, you can typically fund the account and begin using it the same day. For online applicants, approval time will vary by individual; you may qualify for immediate access, or the process may take up to two business days to process. Mailing your account documents can take up to 10 days.

After your account is open, your first deposit will usually process within two business days, unless the bank places a hold on it. Deposits by bank transfer can take up to five business days. Once your first deposit processes and the balance is available, you can use your account and overdraft it if you spend more than your available balance.

Note that you cannot use a bank account until you fund it, even for bank accounts that do not require an opening deposit. In other words, you cannot open a checking account with no opening deposit and then immediately overdraft it to “borrow” money from the bank; you will need to add funds to the account before using any of the account features.

Using Overdrafts and Overdraft Protection

According to federal law, banks must have your consent before allowing overdrafts (and subsequently charging overdraft fees).^[1] The option to consent to overdrafts will be part of your account agreement if your bank allows it. Exceptions to this are pre-authorized transactions such as checks and recurring payments, which will automatically overdraw your account and can lead to additional fees, regardless of what overdraft settings you choose.

It is important to have a clear understanding of your bank’s overdraft policies; many banks set maximum overdraft amounts or will only allow overdrafts for certain transactions. For more information on overdrafts, including overdraft fees and limits at major U.S. banks, see our research on how much you can overdraft your checking account, whether you can transfer an overdraft to a credit card, and whether you can overdraw your savings account.

Overdraft Protection Availability

If your account is eligible for overdraft protection, you will need to link a different account — usually a savings account, second checking account, line of credit, or credit card — to your checking account to cover potential overdrafts. When you overdraft, the bank will draw funds from the linked account to cover the transaction and keep your checking account balance positive. Note that if you use a line of credit for overdraft protection, you will accrue interest.

Banks That Allow Overdrafts Right Away

To find information about using overdraft features, we contacted each of the banks listed below and viewed their account disclosures. The following banks allow you to use your account for transactions (including overdrawn transactions with fees) immediately after your account is open and funded, and they allow you to use overdraft protection after enrolling and linking a second account:

Ally Bank

• Details: You can overdraft your Interest Checking Account by linking your Online Savings Account or Money Market Account; overdrafts are covered by transferring funds in $100 increments.^[2]
• Fees: None^[2]
• Find out more

Axos Bank

• Details: You can overdraft your Essential Checking, First Checking, or Rewards Checking account by linking another account or a line of credit.^[3]
• Fees: None^[3]
• Find out more

Bank of America

• Details: The optional overdraft protection service allows you to link your checking account to a second checking account, savings account, or credit card to cover overdrafts.^[4]
• Fees: Transfer fees and other fees may apply^[4]
• Find out more

BBVA

• Details: You can link a secondary checking account, savings account, money market account, or line of credit to cover overdrafts. You can also choose to opt-in or opt-out of courtesy overdrafts.^[5]
• Fees: Once-daily inter-account fees and/or non-sufficient funds fees may apply^[5]
• Find out more

Capital One

• Details: The optional overdraft protection service allows you to link your checking account to a second checking account, savings account, or credit card to cover overdrafts.^[6]
• Fees: Transfer fees and other fees may apply^[6]
• Find out more

Chase Bank

• Details: You can link a savings account to cover overdraft transactions from checking accounts. The service is not available for the Chase Secure Checking account.^[7]
• Fees: None for overdraft transfers, but regular savings transfer fees apply for transactions over six per month^[7]
• Find out more

CIT Bank

• Details: You can cover overdrafts from an eChecking account by linking a Money Market or CIT Savings account; otherwise, the transaction will be declined.^[8]
• Fees: None^[8]
• Find out more

Citibank

• Details: You can use overdraft protection with any Citibank checking account — link a money market account, savings account, or line of credit to cover overdraft transactions.^[9]
• Fees: $10 transfer fee (charged once per day)^[9]
• Find out more

Citizens Bank

• Details: You can use overdraft protection to transfer from a linked savings account or line of credit to an overdrawn checking account^[10]
• Fees: Daily transfer fees apply^[10]
• Find out more

Discover

• Details: You can link a Cashback Debit, Money Market, or Savings account to cover overdrafts from another account; there is a limit of six transfers per month.^[11]
• Fees: None^[11]
• Find out more

Fifth Third Bank

• Details: For a Free Checking plus Extra Time account, you can get extra time to make a deposit to cover overdraft transactions. Alternatively, for all checking accounts, you can opt-in to overdraft protection coverage and get up to five overdraft transactions per day.^[12]
• Fees: Typically $37 per transaction^[12]
• Find out more

Huntington Bank

• Details: You can select Huntington’s standard overdraft practices or opt-in to coverage with a linked account or an overdraft line of credit. Transfers occur in increments of $100.^[13]
• Fees: None for transfers from linked accounts; fees do apply for standard overdraft policies^[13]
• Find out more

PNC Bank

• Details: You can link a secondary checking account, savings account, money market account, credit card, or line of credit to cover overdraft transactions. If you don’t link an account, you can still select for PNC to allow overdrafts.^[14]
• Fees: None for transfers for a linked account; standard fees apply if you don’t link an account^[14]
• Find out more

SunTrust Bank

• Details: You can link a secondary checking account, savings account, money market account, credit card, or line of credit to cover overdraft transactions. If you don’t link an account, you can still select for SunTrust to allow overdrafts.^[15]
• Fees: None for transfers for a linked account; standard fees apply if you don’t link an account^[15]
• Find out more

TD Bank

• Details: You can link a savings or money market account to cover overdraft transactions. You can also select for TD Bank to allow overdrafts without linking an account, but fees will increase.^[16]
• Fees: Transfer fees may apply^[16]
• Find out more

U.S. Bank

• Details: You can link up to three eligible accounts (e.g., savings, money market, or credit card) for overdraft protection. Transfers occur in increments of $50.^[17]
• Fees: None, unless there is no linked account^[17]
• Find out more

Wells Fargo

• Details: You can link up to two accounts (one savings, one credit) to cover overdraft transactions, and you can choose which to draw from first; savings accounts are the default protection accounts.^[18]
• Fees: One transfer fee per day, regardless of the number of transactions^[18]
• Find out more

For the banks listed above, you can overdraw your account regardless of which overdraft setting you choose, unless you specifically enroll in an all-denial option.

Keep in mind that when you overdraft your account, you are immediately responsible for repaying the overdrawn amount. If you don’t, you may incur additional fees on top of the standard overdraft fee. The bank may also choose to close your account or send it to collections if you do not repay the overdraft.

Online Banks (They Don’t Allow Overdrafts Right Away)

In the course of our research, we found that some online banks have different policies regarding overdrafts and overdraft protection:

• Chime: Requires account holders to enroll in overdraft protection to have access to overdrafts
  • Chime’s “SpotMe” program does not require a second account, and it allows account members who are in good standing and receive monthly direct deposits to approve overdrawn debit card purchases up to a specific limit, determined on a case-by-case basis. See our related research on getting cash back from Chime SpotMe.
• Simple: Automatically denies overdrafts and does not allow account holders to link a second account for overdraft protection
• Varo: Requires account holders to enroll in overdraft protection to have access to overdrafts
  • Varo’s “No Fee Overdraft” program does not require a second account, and it allows account members who are in good standing and receive monthly direct deposits to have a negative account balance of up to $50.^[19]

Why and How to Avoid Overdrafts

In general, it is best to avoid overdrafts if possible. Frequent overdrafts can place your account in poor standing and may eventually lead the bank to freeze or close your account. Additionally, you will be subject to fees — usually around $30 to $40 per overdrawn transaction, plus extended overdraft fees if your account remains negative for several days.

To avoid overdrafts, you should track your spending, and be aware of things like debit authorization holds. You may want to set up alerts from your bank by text or email to more easily track your account activity. You can also opt-out of overdraft protection and request that your bank deny any transaction that would overdraw the account.

If you are intentionally overdrawing your account due to a financial need, you may want to consider a different way of getting short-term funds, such as borrowing a small amount from a friend or relative or taking a small loan. Short-term loans come with unique risks and charges, such as high interest rates, but they will allow you to get the funds you need while keeping your bank account in good standing.

In Summary

The process of opening and funding a checking account can take anywhere from one to 10 business days. Most major banks, including Bank of America, Capital One, PNC, and Wells Fargo will allow you to make overdraft transactions as soon as your account is open in funded, and you can enroll in overdraft protection as soon as you link a second account. Online banks like Chime and Varo will not allow you to overdraft until you enroll in their overdraft protection programs.

For more on bank overdraft policies, our article explains how many times you can overdraft an account.