BMO overdraft protection is optional and must be set up in advance

BMO does not automatically overdraft your checking account. If you attempt a transaction that exceeds your balance, the transaction will be declined unless you have overdraft protection enabled. This is a service you choose to turn on, and it requires you to link it to another account or enroll in a specific overdraft program.

Without overdraft protection, a declined transaction costs you nothing. With it, you can complete the transaction but will pay a fee and owe the bank the overdrawn amount. The specifics depend on which overdraft option you select.

Key Takeaways

  • BMO offers overdraft protection through linked accounts (like savings) or through its overdraft line of credit, but you must set it up yourself—it is not automatic.
  • If you overdraft without protection enabled, your transaction will simply be declined with no fee charged.
  • Overdraft fees at BMO vary by account type and the overdraft method you choose, so check your account terms or call to confirm the exact cost.
  • Overdrafts are repaid from your next deposit, and if you do not repay within a set period, additional fees may apply.
  • You can disable overdraft protection at any time by contacting BMO or adjusting your account settings online.

How to set up overdraft protection at BMO

Log into your BMO online banking account or mobile app and look for account settings or overdraft options. BMO typically offers two routes: linking overdraft protection to a savings account or line of credit you already hold, or enrolling in BMO's overdraft program if you meet the requirements.

If you choose linked-account protection, BMO will transfer funds from your savings account to cover the overdraft automatically. This method usually carries no fee for the transfer itself, though your savings account balance will drop. If you choose the overdraft line of credit or overdraft program, you will pay a fee per overdraft transaction, typically between $35 and $45 depending on your account type, though this varies.

You can also call BMO customer service at the number on the back of your debit card to discuss overdraft options and have them set up protection for you over the phone.

What happens when you overdraft

When a transaction would overdraw your account and you have overdraft protection enabled, BMO allows the transaction to go through. The amount you owe appears as a negative balance in your checking account. You will see a fee posted to your account, usually within one business day.

The overdraft must be repaid from your next deposit. If your deposit is large enough, it will cover both the overdrawn amount and the fee. If you do not deposit enough to cover the full overdraft within a certain timeframe—typically 30 days, though this varies—BMO may charge an additional fee for the extended overdraft.

If you have linked-account protection, the transfer happens automatically, and your savings account balance decreases by the amount transferred. You will still see the overdraft fee posted to your checking account.

Overdraft fees and how they add up

BMO charges a fee each time you overdraft, not a daily fee. A single overdraft transaction might cost $35 to $45, depending on your account type. If you overdraft multiple times in one day, you may be charged multiple fees—one per transaction—though some banks cap the total daily fees at a certain amount.

If your overdraft is not repaid within 30 days, BMO typically charges an additional fee. If it remains unpaid for 60 days or longer, further fees may apply, and BMO may close your account or report the debt to a collection agency.

The exact fee structure depends on your specific BMO account. Business accounts, student accounts, and premium accounts may have different overdraft terms. Check your account agreement or contact BMO directly to confirm the fees that apply to your account.

Turning off overdraft protection

You can disable overdraft protection at any time through your online banking account, mobile app, or by calling BMO. Once disabled, any transaction that would overdraw your account will be declined, and you will not be charged an overdraft fee.

Disabling protection does not affect any existing overdraft balance you already owe. You will still need to repay that amount from your next deposit. Disabling it only prevents future overdrafts from being allowed.

Alternatives to overdraft protection

If you are concerned about overdraft fees, consider setting up account alerts instead. Most BMO accounts allow you to receive notifications when your balance drops below a certain amount. This gives you time to deposit funds or transfer money before a transaction is declined.

You can also link your BMO checking account to a savings account and manually transfer funds when needed, rather than relying on automatic overdraft transfers. This gives you more control and avoids fees.

Another option is to use a different payment method when your balance is low—for example, paying with a credit card instead of your debit card, or using a peer-to-peer payment app. This keeps you from overdrafting your checking account entirely.

What to do if you overdraft by mistake

If you overdraft and are charged a fee, contact BMO as soon as possible. Explain the situation and ask whether the fee can be reversed. BMO may waive one overdraft fee per year if you have a good account history, though this is not may provide and depends on the representative and your account standing.

If you have overdrafted multiple times and are facing multiple fees, ask BMO about a payment plan or hardship options. Some banks will work with customers to reduce or spread out the repayment of overdraft debt, especially if the overdraft was caused by a one-time error or emergency.

Frequently Asked Questions

Can BMO overdraft my account without my permission?

No. BMO will not allow overdrafts unless you have set up overdraft protection yourself. If you have not enabled it, transactions that exceed your balance will be declined. You must actively choose to turn on overdraft protection.

What is the difference between overdraft protection and overdraft fees?

Overdraft protection is the service that allows the transaction to go through. Overdraft fees are the charges BMO applies when you use that protection. You can have protection enabled without using it—if you never overdraft, you pay no fees.

How long do I have to repay an overdraft?

You should repay it from your next deposit. If you do not repay within 30 days, BMO will charge an additional fee. Extended overdrafts can result in account closure or collection action, so repay as soon as possible.

Will an overdraft hurt my credit score?

An overdraft alone does not directly affect your credit score because it is not reported to credit bureaus. However, if BMO sends your unpaid overdraft to a collection agency, that collection account will appear on your credit report and damage your score.

Can I overdraft my BMO savings account?

BMO savings accounts typically do not have overdraft protection. Overdraft options are usually available only on checking accounts. If you need overdraft coverage, link your savings account to your checking account as the backup source.