diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
index 717377e10f..368dfe1ec5 100644
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -2288,7 +2288,8 @@ static UniValue listlockunspent(const JSONRPCRequest& request)
 static UniValue settxfee(const JSONRPCRequest& request)
 {
     RPCHelpMan{"settxfee",
-        "\nSet the transaction fee per kB for this wallet. Overrides the global -paytxfee command line parameter.\n",
+        "\nSet the transaction fee per kB for this wallet. Overrides the global -paytxfee command line parameter.\n"
+        "Can be deactivated by passing 0 as the fee. In that case automatic fee selection will be used by default.\n",
         {
             {"amount", RPCArg::Type::AMOUNT, RPCArg::Optional::NO, "The transaction fee in " + CURRENCY_UNIT + "/kB"},
         },
@@ -2309,12 +2310,15 @@ static UniValue settxfee(const JSONRPCRequest& request)
 
     CAmount nAmount = AmountFromValue(request.params[0]);
     CFeeRate tx_fee_rate(nAmount, 1000);
+    CFeeRate max_tx_fee_rate(pwallet->m_default_max_tx_fee, 1000);
     if (tx_fee_rate == 0) {
         // automatic selection
     } else if (tx_fee_rate < pwallet->chain().relayMinFee()) {
         throw JSONRPCError(RPC_INVALID_PARAMETER, strprintf("txfee cannot be less than min relay tx fee (%s)", pwallet->chain().relayMinFee().ToString()));
     } else if (tx_fee_rate < pwallet->m_min_fee) {
         throw JSONRPCError(RPC_INVALID_PARAMETER, strprintf("txfee cannot be less than wallet min fee (%s)", pwallet->m_min_fee.ToString()));
+    } else if (tx_fee_rate > max_tx_fee_rate) {
+        throw JSONRPCError(RPC_INVALID_PARAMETER, strprintf("txfee cannot be more than wallet max tx fee (%s)", max_tx_fee_rate.ToString()));
     }
 
     pwallet->m_pay_tx_fee = tx_fee_rate;
diff --git a/test/functional/wallet_multiwallet.py b/test/functional/wallet_multiwallet.py
index 66e0f1f32b..64db9b363c 100755
--- a/test/functional/wallet_multiwallet.py
+++ b/test/functional/wallet_multiwallet.py
@@ -7,6 +7,7 @@
 Verify that a dashd node can load multiple wallet files
 """
 from threading import Thread
+from decimal import Decimal
 import os
 import shutil
 import time
@@ -204,9 +205,9 @@ class MultiWalletTest(BitcoinTestFramework):
         self.log.info('Check for per-wallet settxfee call')
         assert_equal(w1.getwalletinfo()['paytxfee'], 0)
         assert_equal(w2.getwalletinfo()['paytxfee'], 0)
-        w2.settxfee(4.0)
+        w2.settxfee(0.001)
         assert_equal(w1.getwalletinfo()['paytxfee'], 0)
-        assert_equal(w2.getwalletinfo()['paytxfee'], 4.0)
+        assert_equal(w2.getwalletinfo()['paytxfee'], Decimal('0.00100000'))
 
         self.log.info("Test dynamic wallet loading")