There is no federal dollar cap on overdraft fee limits, so each bank sets its own amount, which today ranges from $0 at banks that have eliminated the charge to about $35 at those that haven’t, with an industry average near $27. What federal law does control is when a bank can charge you at all, and most banks now apply their own daily caps, small-balance cushions, and grace periods that put practical ceilings on what you actually pay.
No Federal Cap on the Dollar Amount
Federal law does not set a maximum amount that a bank can charge for a single overdraft. Each institution writes its own fee schedule, which is why the same overdraft can cost $10 at one bank and $35 at another.
The Consumer Financial Protection Bureau finalized a rule in December 2024 that would have capped overdraft fees at $5 for banks and credit unions with more than $10 billion in assets, effective October 1, 2025. Congress repealed that rule under the Congressional Review Act in May 2025, and the CFPB is now barred from issuing a substantially similar regulation. No federal fee cap is currently in place for any size of institution.
Several large banks have voluntarily eliminated overdraft fees entirely, including Capital One, Citibank, Ally Bank, and Discover. Others, such as Bank of America, Huntington Bank, and KeyBank, have reduced fees to between $10 and $20 per occurrence. If your bank still charges $35, moving your account is the most direct way to lower what you pay.
The Opt-In Rule Is the Strongest Federal Protection
The clearest legal limit on overdraft fees isn’t a dollar amount. It’s a consent rule. Under Regulation E, a bank cannot charge you an overdraft fee on an ATM withdrawal or a one-time debit card purchase unless you have specifically agreed to that coverage in advance.1eCFR. 12 CFR 1005.17 – Requirements for Overdraft Services Without your opt-in, the bank has to decline the transaction. No fee, no negative balance.
You can revoke your opt-in at any time, and the bank must process the revocation as soon as reasonably practicable.2Consumer Financial Protection Bureau. 12 CFR Part 1005 (Regulation E) – Section 1005.17 Requirements for Overdraft Services Call your bank, go online, or visit a branch and ask to opt out of overdraft coverage on debit card and ATM transactions. From that point on, those transactions will be declined when your balance is too low.3FDIC.gov. Overdraft and Account Fees
The opt-in rule does not cover checks or recurring electronic payments like automatic bill pay and direct debits. Your bank can pay those, and charge you an overdraft fee, even if you never opted in. If the bank instead declines a check or recurring payment, it may charge a non-sufficient funds (NSF) fee, though most large banks have eliminated NSF fees in recent years.4Consumer Financial Protection Bureau. Vast Majority of NSF Fees Have Been Eliminated, Saving Consumers Nearly $2 Billion Annually
Daily Caps on the Number of Fees
No federal rule sets a maximum number of overdraft fees per day. The Office of the Comptroller of the Currency has warned, however, that charging fees without a daily limit, or with a very high one, has contributed to findings that a bank’s overdraft program is unfair under federal consumer protection law.5Office of the Comptroller of the Currency. Overdraft Protection Programs: Risk Management Practices That pressure has pushed most banks to cap their own charges.
In practice, most major banks limit overdraft fees to between three and six per business day. Once you hit that cap, additional overdrawn items are typically either covered at no extra charge or declined. Check your account agreement for the exact number. Without a cap, a string of small purchases can generate fees that dwarf the transactions themselves.
Small-Balance Buffers
Many banks apply a “de minimis” threshold, a small cushion before any overdraft fee kicks in. If your account dips below zero by less than the threshold, no fee is charged. The FDIC cites $10 as a common example, and CFPB data shows the average threshold at surveyed banks and credit unions was roughly $9.6CONSUMER FINANCIAL PROTECTION BUREAU. Data Point: Checking Account Overdraft at Financial Institutions Served by Core Processors Some banks go much higher. Huntington Bank waives fees when the account is overdrawn by less than $50, and Santander’s threshold is $100.
If your balance drops to negative $4 at a bank with a $10 cushion, you owe nothing extra. Fall to negative $11, and the full overdraft fee applies. Your account agreement specifies the exact figure, and federal rules require overdraft fee information to be disclosed clearly.7eCFR. 12 CFR 1030.11 – Additional Disclosure Requirements for Overdraft Services
Grace Periods and Extended Overdraft Fees
A growing number of banks give you a window, usually around 24 hours, to bring your balance back above zero before charging an overdraft fee. The OCC has encouraged grace periods as a risk-mitigating practice.5Office of the Comptroller of the Currency. Overdraft Protection Programs: Risk Management Practices Wells Fargo, U.S. Bank, and PNC are among the major institutions offering at least a 24-hour window before fees are assessed. A transfer or deposit made inside that window can cancel the charge entirely.
If your account stays negative for several days, some banks add a second layer of fees known as extended or sustained overdraft fees. Regulation E defines these as fees charged when you haven’t repaid the overdraft after a set period, such as five or more business days.2Consumer Financial Protection Bureau. 12 CFR Part 1005 (Regulation E) – Section 1005.17 Requirements for Overdraft Services These daily charges have historically run from $5 to $10 on top of the initial fee, though many banks have reduced or eliminated them under regulatory pressure.8Consumer Financial Protection Bureau. Supervisory Highlights Junk Fees Update Special Edition Issue 31, Fall 2023
Multiple Fees for the Same Transaction
When a payment bounces, the merchant may resubmit it, sometimes more than once. Some banks have charged a separate NSF or overdraft fee each time the same transaction was re-presented, turning one failed payment into two or three charges. The FDIC has found this practice creates a heightened risk of violating federal consumer protection law and has urged banks to stop charging more than one fee for the same transaction regardless of how many times a merchant resubmits it.9Federal Deposit Insurance Corporation. Supervisory Guidance on Multiple Re-Presentment NSF Fees
Scan your statements for identical dollar amounts posted a few days apart. If you find them, contact your bank and ask for the duplicate charges to be reversed. This is one of the billing errors regulators take most seriously.
How to Push Back on Overdraft Fees
Start with your bank. Many will reverse one or more overdraft fees as a courtesy, especially if you have a long account history or the fee resulted from a timing issue with a deposit. Be specific about the fee and the reason.
If your bank won’t help, file a complaint with the Consumer Financial Protection Bureau. The online process takes about 10 minutes, and the CFPB forwards your complaint to the bank, which generally must respond within 15 days.10Consumer Financial Protection Bureau. Submit a Complaint Regulators have flagged several practices as potentially unfair or deceptive: unanticipated fees, fees charged without proper opt-in consent, and multiple fees on the same re-presented transaction.11Consumer Financial Protection Bureau. Consumer Financial Protection Circular 2022-06: Unanticipated Overdraft Fee Assessment Practices
The most effective long-term step is to opt out of overdraft coverage for debit card and ATM transactions if you would rather have a card declined than pay a fee. For checks and recurring payments, which the opt-in rule doesn’t cover, low-balance alerts through your bank’s app give you time to move money before a transaction overdraws the account.