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If you’re a Wells Fargo customer and spend more money than you have in your checking account, there are consequences. The severity — how much you pay in fees — depends largely on the type of transaction you make and the status of your linked accounts.
How Wells Fargo treats overdrafts
If you don’t have enough money in your Wells Fargo account, the bank typically won’t cover ATM or everyday debit transactions that exceed the balance. Instead, it declines them without charging a fee. But the institution — like many others — uses its own discretion when it comes to checks and recurring bill payments. So those payments may go through even if there is not enough money in your account, and you’d be charged an overdraft fee. How much? Here are some details:
- The standard overdraft fee is $35
- You can be charged up to three fees per day, for a maximum of $105
- Unlike some banks, Wells Fargo won’t charge a continuous overdraft fee if your account remains in the red for an extended period
Overdraft protection transfer
One way to avoid the $35 fee is to sign up for overdraft protection transfers. This optional service links one or two Wells Fargo accounts — a savings account, credit card or line of credit — to your checking account to cover any shortfalls.
If you don’t have enough money in your checking account while making a transaction, Wells Fargo will transfer or advance money from one or both linked accounts and charge you an overdraft protection transfer fee of $12.50. So the service is not free, but it’s better than a $35 overdraft fee.
Wells Fargo will transfer or advance money from a linked account and charge you a fee of $12.50.
From a savings account, Wells Fargo will transfer enough to cover the transaction plus the $12.50 fee, or a minimum of $25.
Overdraft transfers out of your savings account will count toward the account’s limit of six transfers or withdrawals per monthly fee period, as required by federal law. If you exceed the limit, Wells Fargo can charge an additional excess activity fee on the savings account.
With overdraft transfers from a credit card, Wells Fargo will advance the exact amount needed to cover the transaction or a minimum of $25, and the $12.50 fee will be charged to your card.
If there are two linked accounts, Wells Fargo will use the savings account first, unless you specify it use the credit card or line of credit first.
Debit card overdraft service
Wells Fargo also offers an optional debit card overdraft service, where the bank approves everyday debit card and ATM transactions at its discretion, even if there’s not enough money in your bank account.
Many people, however, would be better off without this service. Signing up means that when ATM and debit card swipes put you in the red, you are assessed the maximum overdraft fee of $35, possibly multiple times. By law, the bank must get your permission before enrolling you in debit card overdraft service. If you skip this service, your swipes are simply declined and no fee is assessed.
With debit card overdraft service, ATM and debit card swipes that put you in the red will cost you $35.
If your account is not in good standing or if you’ve had frequent overdrafts, Wells Fargo may decline to cover the overdraft whether you’re enrolled in the optional program or not. In that case, debit or ATM card transactions also will be declined without incurring additional fees.
If Wells Fargo returns a check you wrote, however, or declines a recurring bill payment because of lack of funds, you would be charged a nonsufficient funds fee of $35 — the same amount as an overdraft charge.
» Fees too high? Compare Wells Fargo with other banks and credit unions in our list of overdraft fees by financial institution.
Small safety buffers
Wells Fargo has a $5 margin of error. If your balance is overdrawn by $5 or less at the end of the day, it doesn’t charge overdraft fees. Also, the bank gives you a cutoff time at the end of the business day to cover any overage without charging you a fee.
Updated Oct. 26, 2017.