Overdraft and NSF risk while you hold a bank bonus
An overdraft is the bank paying a transaction you could not cover. The CFPB says deposits are not always available immediately, and that many banks charge $30 or more per overdraft. Moving a paycheck to a bonus account while bills still draft the old one creates that fee. An unpaid negative balance that leads the bank to close the account can be reported to a checking-account company. Capital One's 360 Checking page says that account has no overdraft fees.
The bonus is often earned by pointing payroll at a new account. The rent, the card payment, and the insurance still leave from the old one until you move them. That gap is where overdrafts happen.
What the fee actually is
An overdraft occurs when you do not have enough money to cover a transaction, but the bank pays it anyway. 1 The CFPB's tip on that page: deposits may not be immediately available, so you can overdraw even after you have "made" a deposit. 1 Many banks and credit unions charge $30 or more per overdraft, and they can charge more than one in a day. 2 Two fees at $30 are $60, which is a real bite out of a few-hundred-dollar bonus. The $30 figure is the CFPB's "or more" description, not your bank's schedule. 2 Read your schedule. The calculators will not guess a fee the page does not print.
Which payments can still fee if you opted out
Institutions cannot charge you for overdrafts on ATM transactions unless you have opted in. 2 Checks and ACH payments are a different path. A bill that drafts the old account after you moved the paycheck can be paid into overdraft, or returned. Switch direct deposit without missing a paycheck is the sequence that keeps one account funded until the other has posted pay.
Why this follows you
The CFPB says an unpaid negative balance, such as from an overdraft, that you have not repaid, followed by the bank closing the account, is the sort of negative information checking-account reporting companies store. 3 A bonus that nets $300 and leaves a $35 unpaid fee can cost you the next account. That dollar figure is an illustration, not a posted Chase or Wells Fargo charge. Does opening bank accounts hurt your credit explains that this file is not your FICO score, and that it still decides the next checking application.
One bank that prints a different rule
Capital One's 360 Checking offer page says you should not have to pay overdraft fees, and that with 360 Checking you do not. 4 That sentence is about that account. It does not waive fees at the bank you left, and it does not waive a merchant's returned-item fee. If the bonus account is Chase or Wells Fargo, copy the overdraft section of that bank's deposit agreement before you drain the old balance.
A pending bonus deposit is not a cushion
Wells Fargo says an Early Pay Day credit does not count toward the bonus until it posts and is no longer pending. 5 Spending that early memo, or treating it as available for bills, is how the account overdraws before the scheduled pay date. Pending or posted is the bonus version of the same fact. Leave a cash buffer in the bill-pay account until a deposit shows as available. The deposit that is supposed to refill it still has to match what counts as a direct deposit. If you are tempted to close the old account the same week, read can you close a bank account after the bonus first.
Common questions
Does opting out of debit overdraft protect every payment?
No. For one-time debit card and ATM transactions, a fee generally requires your opt-in. Checks and recurring electronic payments can still overdraw and can still be charged, and a returned ACH can trigger a fee from the biller as well.
Will one overdraft fee void the bonus?
The offers we read do not say a single overdraft fee cancels the bonus. They do say the account must be open, and in Capital One's case in good standing, when the bonus is paid. A fee that drives the balance negative and gets the account closed is a different problem.
How much buffer should I leave?
Enough to cover the bills that still draft the old account until the first new paycheck is posted and available, plus the new account's opening requirement. That amount is yours to set. A pending early deposit is not the buffer.
Sources
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