Overdraw preferences and dishonour payments
Overdrawn payments
When a payment takes your balance below zero or overdraws your account further. A $15 fee is charged once on any given day. You’ll also pay debit interest while your balance is negative.
Outward dishonour
When a payment from your account is declined due to not having enough money in your account. No fee is applied, but your direct debit, cheque or periodical payment won’t go through.
Inward dishonour
When a payment coming into your account is declined. No fee is applied and this usually happens when there’s an issue with the payer’s account, not yours.
Simple steps to stay in control
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Preventing your account from overdrawing
Tips to avoid an overdrawn balance
- Check your account balance often to make sure you have enough cleared funds (available funds for scheduled payments).
- Change or pause direct debits or recurring card payments if timing is tight.
- Update your Overdraw Preference to tell us whether to allow or deny payments when your balance is insufficient.
- Keep a small amount of money aside to help cover bills that are higher than expected.
Preventing an outward dishonour
Tips to avoid an outward dishonour
- Keep enough cleared funds in your account for direct debits, cheques or periodical payments that are due.
- Review upcoming payments in Online Banking to help you plan ahead.
- Change the payment day with the merchant if the current timing is difficult.
- If a payment is due today, adding money to your account early in the day can help the payment go through.
Preventing an inward dishonour
Tips to avoid an inward dishonour
- Make sure the person or business sending you money has the correct account details.
- If you are expecting a cheque or direct debit to be deposited, check that the payment has been sent.
- If a deposit has not arrived, follow up with the sender to confirm when it will be made.
What is Overdraw Preference?
Overdraw Preference lets you choose how certain payments are handled when your account doesn’t have enough money. This can help important payments go through when timing is tight. These can include scheduled direct debits, regular payments, cheques and scheduled BPAY® payments.
- If enabled: We may allow these payments to go through, even if your balance is low. Your account may go below $0 or become further overdrawn, and an overdrawn fee and debit interest may apply.
- If disabled: We’ll try to decline these payments to help stop your balance going below $0. In some situations, your balance may still go below $0 if we can’t reasonably stop the payment (for example, due to processing timing or system availability).
This feature isn’t available for Westpac Choice Concession accounts or Westpac Choice accounts where any account holder is under 18. These accounts will only go below $0 if we can’t reasonably stop it, and no overdrawn fee or debit interest will apply.
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How to set up Overdrawn Preference
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Make sure you have the latest version of the app.
- Choose the account you want to update
- Go to Manage, then See all
- Select Manage Overdraw Preference
- Choose if you want Westpac to allow or decline these payments by selecting Enable or Disable
- Select Update.
In Online Banking
- Choose the account you want to update
- Select Account settings
- Select Manage Overdraw Preference
- Choose if you want Westpac to allow or decline these payments by selecting Enable or Disable
- Select Update to save your changes.
Via phone or branch
- Call us on 1300 558 724 between 8am – 8pm (Sydney time) 7 days
- If more than one person must authorise changes, you may need to update the preference in branch.
Did you know?
If you receive a protected payment such as income support or pension while your account is overdrawn, you may still be able to withdraw up to 90% of your fortnightly payment. Learn more.
Service fees
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| When does it apply? | Fee amount |
| When a transaction overdraws your account and your balance is not back to positive by the end of the day. The fee is charged at most once per day. If you overdraw your account on another day, you may be charged again for that day. You’ll also be charged debit interest while your balance is negative. We calculate this each day and charge it at the end of the month. This fee and debit interest does not apply to Westpac Choice Concession, Westpac Choice for customers under 18, Bump Savings or Westpac Life. Check your product T&Cs. |
$15 (max per day) |
| When does it apply? | Fee amount |
| When we decline a cheque, direct debit or periodical payment due to not enough funds on some accounts. | No fee is charged |
| When does it apply? | Fee amount |
| When a cheque, direct debit or other payment coming into your account is declined and not credited to your account. This may happen if the sender doesn’t have sufficient funds. | No fee is charged |
Frequently asked questions
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Can a direct debit overdraw my account?
Yes. We may allow a direct debit to go through when funds are low, and the payment will overdraw your account balance. A fee and interest may apply. If declined, you'll need to arrange payment with the merchant.
This may also happen with other scheduled payments, such as regular transfers, cheques and BPAY® payments.
To reduce the chance of this happening, keep enough available money in your account for upcoming scheduled payments.
How do I avoid the overdrawn fee if a payment goes through?
The fee will not be charged if the account is returned to a positive balance by 6pm (Sydney time) on the same day.
If we don’t charge the fee on this occasion, we may still charge it if your account is overdrawn again in the future. See your account terms and conditions for more information.
How long until my Overdraw Preference takes effect?
Changes usually take effect by the end of the day or the next business day. For example, if you update your preference on a Sunday and Monday is a public holiday, your change will usually take effect on Tuesday evening.
Your account can still go below $0 in some situations. This can happen if a payment is already being processed, we don’t receive the request in time, or we can’t stop the payment.
Why did my account go below $0 even with Overdraw Preference disabled?
Your account can still go below $0 in some situations. This can happen if a payment is already being processed, we don’t receive the request in time, or we can’t stop the payment.
For example, this may happen with some public transport payments. When you tap on, a small amount may be held to start the trip. After you tap off, the full fare is taken. If there isn’t enough money in your account at that time, your balance may drop below $0, even if you had enough when you first tapped on.
To avoid this, keep enough money in your account in advance of expected or scheduled payments.
Where can I find other fees?
See the fees for your account on the relevant product page for Westpac Choice, Westpac 55+ and Retired, Business One, Business One Plus.
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Things you should know
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