How to Get Out of Overdraft Protection

Overdraft protection lets your bank cover payments when you don’t have enough money, but it can trap you in fees and negative balances if you rely on it too often.

“Getting out of overdraft protection” usually means two things: paying off any negative balance and stopping your account from dipping below zero going forward (or turning the feature off completely).

KOHO Essential to Avoid Overdraft

A simple way to get out of the overdraft cycle is to switch your everyday spending to a prepaid setup.

With KOHO Essential:

• It has a low monthly plan fee that can be waived when you set up direct deposit or add +$1,000.

• Use a prepaid Mastercard® for groceries, bills, subscriptions, and travel.

• Grow your savings with a 2% interest savings rate on your entire balance.

• Earn 1% cash back on groceries, eating & drinking, and transportation.

• You can subscribe to Credit Building for $10/month, it's an affordable way to build your credit history.

• Enjoy unlimited transactions and free e-transfers (never worry about fees when sending money to someone again).

How to Get Out of Overdraft Protection Step by Step

1. Find Out How Much You Owe

Check your bank app or statement and note:

• Your current balance (how far below zero you are, if at all)

• Any overdraft limit and fees/interest you’re being charged

You can’t fix it if you don’t know the exact number.

2. Stop Using the Overdraft for New Spending

To stop going deeper:

• Try to pause discretionary spending from that account

• Keep enough in your bank account just for essential bills until you’re back above zero

The goal is to stop treating overdraft as “extra money.”

3. Pay Down the Negative Balance on a Plan

Decide how much you can put toward your overdraft each paycheque. Even small, regular payments help:

• Set a fixed amount (for example, $50–$100 per pay)

• Keep going until your balance is consistently positive

Think of it as paying off a small loan.

4. Ask Your Bank to Turn Off or Reduce Overdraft

Once you’re out:

• You can ask your bank to disable overdraft protection entirely, or

• Reduce the limit so it’s only there as a last resort safety net

That way, you’re less likely to slide back into negative territory.

5. Build a Buffer So You Don’t Need Overdraft Again

Use a separate account or tool to build a tiny emergency cushion:

• Move a bit of each paycheque into savings

• Aim for at least a few hundred dollars as a starter buffer

That cushion can cover “oops” moments so you don’t have to rely on overdraft at all.