About Overdrafts
What is an overdraft?
Any time a transaction results in a negative balance to your account, it’s considered an overdraft. For example, an overdraft takes place when you make a payment and don’t have enough money in your account to cover it. This is not the only scenario in which you could overdraw your account.
What is overdraft protection?
These are optional services that let you link your BMO savings, money market or other checking account or Line of Credit as a backup to your checking account to cover an overdrawn account.
BMO offers two types of Overdraft Protection Services to help protect you from paying Overdraft fees. These are Overdraft Funding and Overdraft Protection Line of Credit.
How overdrafts are handled at BMO
At our discretion, we pay checks, automatic bill payments and other transactions that overdraw your account. We’ll decline ATM and everyday debit card transactions that would overdraw your account unless you opt-in to the Overdraft Program for ATM and Everyday Debit Card Transactions described in the Your Options tab. We won’t guarantee that we’ll always pay or authorize any type of transaction even if we’ve paid similar items in the past. Footnote 1 Please see the Fees tab for the fee associated with overdrawing your checking account.
As stated in the Deposit Account Agreement, you agree to immediately repay us the amount of any overdraft, including fees. Any deposits into your checking account will be used to repay the overdraft and associated fees. The order in which you write checks and authorize other withdrawals is not necessarily the same order they post to your account, which will affect whether you incur Overdraft fees.
Additional resources
Helpful tips
Ways to avoid an overdraft
- Consider a BMO Smart Money Checking account with no Overdraft fees.
- Revoke your opt-in to the Overdraft Program for ATM and Everyday Debit Card. Transactions (in other words, opt-out). Overdraft fees will still apply to recurring debit card transactions, ACH payments and checks that overdraw your account.
- Set up Overdraft Funding to have funds pulled from a linked account.
- Apply for an Overdraft Protection Line of Credit to have funds advanced from a line of credit.
- Sign up for BMO Digital Banking to:- Deposit checks from your phone with the BMO Digital Banking app Footnote 2 Footnote 3 .- Set a daily budget and keep track of your spending.- Sign up for email or SMS alerts to receive updates about your account Footnote 3 .- Access account statements and view current balance information.
Avoid overdraft fees with a BMO Smart Money Checking account
Our low monthly fee checking account gives you peace of mind with no Overdraft fees.
Visit the BMO Smart Money Checking account page for full account details.
We give you more time to avoid an Overdraft Fee
Good News! We do not charge an Overdraft Fee if your account is overdrawn by $20 or less at the close of the Business Day Footnote 6 that the item is presented for payment (first Business Day). We will also NOT charge an Overdraft Fee if your account is overdrawn by $20 or less at the close of the first Business Day Footnote 6 after the item is presented for payment (second Business Day).
Example of how our additional time to avoid Overdraft Fees works, assuming no other transactions post to your account on the first Business Day or the second Business Day:
- First Business Day Footnote 6 On Monday, your account has a starting balance of $10. During the day, you write a check for $600 and the check is posted to your account. At the end of the Business Day, the account is overdrawn by $590.
- Second Business Day Footnote 6 On Tuesday, you deposit a check for $580 to your account in your local BMO financial center during business hours. The account is overdrawn by $10 at the end of the second Business Day.
Even though the account is overdrawn by more than $20 at the end of the first Business Day, no Overdraft Fee was charged for the $600 check because your account was overdrawn by less than $20 at the end of the second Business Day.
Fee Associated with Overdrawing Your Account
(This fee does not apply to the BMO Smart Money Checking account)
Overdraft Fee:You will be charged an Overdraft Fee for each item we pay when your account is overdrawn more than $20 after all items are posted to the account. We will not charge you an Overdraft Fee if:
- The amount of the item is less than or equal to $5;
- Your account is overdrawn by $20 or less at the close of the Business Day Footnote 6 the item is presented for payment;
- Your account is overdrawn by $20 or less at the close of the first Business Day Footnote 6 after the item is presented for payment. Deposits may not be available immediately. Please see our Funds Availability Policy for Deposit Accounts in Section 8 of the Deposit Account Agreement for more information;
- Your account has already been charged three (3) Overdraft Fees for the applicable Business Day Footnote 6 ;
- The item is a bank fee we assess pursuant to the terms of the Deposit Account Agreement;
- We previously returned the item unpaid;
- You had sufficient available funds to pay the item when the item was authorized;
- The item is an ATM or everyday debit card transaction and you have not authorized us to pay these types of transactions.
When we return an item unpaid because your account does not have sufficient available funds, we don’t charge a fee.
Your Options for Handling Overdrafts
It costs you nothing to add Overdraft Protection Services to your account.
Who is it for Certain checking account customers can opt-in to this program if they are comfortable overdrawing their account and paying the fees associated with ATM and everyday debit card transaction. How it works We will decline ATM and everyday debit card transactions that would overdraw your account unless you select the Overdraft Program for ATM and Everyday Debit Card Transactions (opt-in) described below:If you choose to opt-in: At our discretion, we’ll pay ATM and everyday debit card transactions that would overdraw your account.Even if we’ve done so before, we don’t guarantee that we’ll always pay or authorize all transactions.If you don't opt-in (in other words, you choose to opt-out) Footnote 5 :We’ll decline ATM and everyday debit card transactions that would overdraw your account. What is costs If you choose to opt-in: You will be charged a $20 fee for each item we pay when your account is overdrawn more than $20 after all items are posted to the account.We will charge a maximum of three Overdraft Fees per business day. Footnote 6 If you don't opt-in (in other words, you choose to opt-out) Footnote 5 :No Overdraft Fee will apply to ATM and everyday debit card transactions.Whether you opt-in or opt-out, Overdraft Fees will apply to recurring debit card transactions, ACH payments and checks that overdraw your account. How to apply To opt-in to this program: Log in to BMO Digital Banking and modify your overdraft preferences within the "Account preferences" section.Use the BMO Bank by Phone self-serve option by calling 1-888-340-2265 and modifying your overdraft preferences within the ATM/Debit Card Services menu.To opt-out of this program: Log in to BMO Digital Banking and modify your overdraft preferences within the "Account preferences" section.Use the BMO Bank by Phone self-serve option by calling 1-888-340-2265 and modifying your overdraft preferences within the ATM/Debit Card Services menuSpeak with a BMO Banker by visiting a BMO financial center or calling 1-888-340-2265.Speak with a BMO Banker for further assistance with self-service options. Who is it for Customers who have a companion checking, savings or money market account to link to cover overdraft. How it works Money transfers automatically from your linked BMO savings, money market or other checking account to cover your overdraft. What is costs There is no fee for Overdraft Funding transfers. How to apply Speak with a BMO Banker by calling 1-888-340-2265 or visiting your nearest BMO financial center. Who is it for Customers who apply for, and are approved for, a line of credit that can be linked to cover overdraft. How it works Accesses your line of credit automatically in increments of $10 to cover the overdrawn amount up to your available credit limit. What is costs No fee to advance from the line of credit.A fixed 18% Annual Percentage Rate (APR) applies to outstanding balances.$15 Late Payment fee How to apply Complete an application in person at a BMO financial center or over the phone by calling 1-888-340-2265.
Frequently Asked Questions
There is no need to enroll. This benefit automatically comes with consumer and business deposit accounts.
You only need to add money to cover your overdrawn balance if your account is overdrawn by more than $20 at the close of the first Business Day Footnote 6 that the item is presented for payment. If you add money and you are still overdrawn by more than $20 by the close of the second Business Day, you will be charged Overdraft Fees for each item that is more than $5. If you add money and you are overdrawn by $20 or less by the close of the second Business Day, you will not be charged Overdraft Fees.
You can know if your account is overdrawn by signing up for BMO Digital Banking app Footnote 3 to:
- Register for email or SMS alerts Footnote 3 to receive updates about your account.
- Access account statements and view current balance information.
- Set up a low balance alert. Learn here how to set up alerts using the BMO Digital Banking app. to notify you when your account falls below your desired threshold.
You can also get this information by calling us or stopping by your local branch.
You only need to add money to cover your overdrawn balance if each item overdrawing your account is more than $5. If your account is overdrawn by more than $20 at the close of the first Business Day Footnote 6 that the item is presented for payment; you will have until the end of the second Business Day to add money to bring your balance to overdrawn on your account by $20 or less to avoid Overdraft Fees.
Full amount will increase Sufficient Available Funds
- Cash deposited in person at a BMO financial center, through the mail, or at ATMs.
- Checks deposited in person at a BMO financial center, through the mail, or at ATMs and there is no Extended Hold placed on the deposit.
- Preauthorized electronic credits (i.e. ACH)
- Transfer from another BMO account through any channel.
- Federal Reserve Bank wire transfers.
- FundsNow Mobile Deposit.
Partial amount will increase Sufficient Available Funds
- Checks deposited in person at a BMO financial center, through the mail, or at ATMs and there is an Extended Hold placed on the deposit – the amount held will not count.
- Standard Mobile Deposit – the first $500 of each check deposit (i.e. check deposit is $600 – only $500 will count).
No amount will increase Sufficient Available Funds
- BMO Digital Banking External Transfer from an account not held at BMO.
Want to learn more?
We’re here to help you choose the best Overdraft Protection Services for you:
Find a financial center
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Call us
Give us a call 24 hours a day, 7 days a week.
Footnote 1 details If for certain reasons we are unable to return an item that overdraws your account, we will pay it and you will be charged any applicable fee associated with paying the item. If the item is an ATM or everyday debit card transaction, you will not be charged the Overdraft Fee if you do not opt-in to the Overdraft Program for ATM and Everyday Debit Card Transactions.
Footnote 2 details Mobile Deposit is available using the BMO Digital Banking app. This service may not function on older devices. Users must be a BMO Digital Banking customer with a BMO account opened for more than 5 calendar days. Deposits are not immediately available for withdrawal. For details, please see the BMO Digital Banking Agreement found at bmo.com/en-us/legal/.
Footnote 3 details Message and data rates may apply. Contact your wireless carrier for details.
Footnote 4 details CDs and IRAs are not eligible to be linked under Overdraft Funding.
Footnote 5 details BMO will automatically decline ATM and everyday debit card transactions that would overdraw your account and no fee will be charged if you have not opted-in to the Overdraft Program for ATM and Everyday Debit Card Transactions.
Footnote 6 details Business days are Monday through Friday except federal holidays.
For additional information about overdrafts, please read the Deposit Account Agreement for Personal and Business Accounts.