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Suppose Party A attempts to withdraw some money from Bank Account X belonging to Party B. Bank Account X is either closed or has insufficient funds, but Party B also owns the well-funded Bank Account Y at the same bank. Does the withdrawal definitely get rejected, or is there some way A can get the money and leave B on the hook for it? In particular, is it possible that the bank could use funds from Account Y to cover the withdrawal without B's consent? Or perhaps that B could simply be left with a negative balance in Account X?

In case it matters, suppose A claims to believe the withdrawal is authorized, but B disagrees. Also suppose all involved parties and banks are in and of the United States.

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    The bank has discretion whether to pay an insufficient fund item or not. – Norm Jul 9 '18 at 17:08
  • Something of a side note: if you're A, you could insist on a cashier's check, money order, or other type of payment method that someone guarantees. – jpmc26 Jul 10 '18 at 0:05
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    Just a comment on "_ is it possible that the bank could use funds from Account Y to cover the withdrawal without B's consent_". Where I've seen this is possible, B would have given consent because it was written into the terms and condition of the account. – TripeHound Jul 10 '18 at 7:57
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An ACH transaction is roughly equivalent to a check. An attempt to withdraw too much may get paid and trigger an overdraft state, or may be declined (and trigger an insufficient funds fee). These decisions are typically fairly complex and have to do with overdrawn amount, account history, average balance, overdraft frequency, personal discretion, etc. As the initiator of the withdrawal you have no idea what will happen, you may or may not get your money.

If the account is linked via an overdraft protection type of program, then the overdraft may trigger a transfer from the 2nd account, otherwise a bank will not automatically take funds from a separate account to satisfy the withdrawal.

If the account owner claims it is an unauthorized transfer, the bank will typically (always?) reverse it or decline it, the initiator would have to use the legal system to pursue repayment of their alleged debt.

Edit: I see I didn't address the situation where the account is closed, if an account is voluntarily closed, the bank may contact the account holder to see if they want to re-open it to allow the transfer, else they'll just decline the transfer outright. That'd only happen if the closure and withdrawal were in very close proximity and at some banks, a long-closed account will have any withdrawal attempts denied immediately.

  • Good thought on a mutual overdraft-type-protection account potentially being drawn, possibly resulting in a similar end result to drawing from a second account, even though that would not be directly allowed. – Grade 'Eh' Bacon Jul 9 '18 at 17:18

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