Overdraft opt-in is the account setting that determines what happens when an everyday debit card purchase or ATM withdrawal would take your balance below zero: the bank either covers it and charges a fee, or declines it at no charge. Coverage for those transactions is something you have to opt into.
Where you'll see it
In your banking app under account settings, often labelled "overdraft coverage," "debit card coverage," or similar — and in the disclosure you signed when the account was opened.
The rule behind it
Consumers who do not opt in to overdraft will generally have debit card purchases and ATM withdrawals declined with no charge if the account is short of funds when they attempt the transaction.
Financial institutions may charge a fee per transaction for this service, typically around $34, and they require repayment with subsequent deposits.
We found that frequent overdrafters – those with more than 10 overdraft and NSF transactions in a year – make up only 9 percent of all accounts at the banks we studied but paid a whopping 79 percent of all overdraft and NSF fees.
Worth reading precisely: that 9% figure describes accounts at the banks in this particular study, and "frequent overdrafters" is defined in the study as more than 10 overdraft and NSF transactions in a year. It isn't a statement about all accounts everywhere.
Consumer info, not financial advice.