diff --git a/src/wallet/rpcwallet.cpp b/src/wallet/rpcwallet.cpp
index 3b8c0e836..9a0dd1c57 100644
--- a/src/wallet/rpcwallet.cpp
+++ b/src/wallet/rpcwallet.cpp
@@ -2337,12 +2337,15 @@ 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 == CFeeRate(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_bumpfee.py b/test/functional/wallet_bumpfee.py
index 38c980775..4fd16ecfa 100755
--- a/test/functional/wallet_bumpfee.py
+++ b/test/functional/wallet_bumpfee.py
@@ -82,7 +82,6 @@ class BumpFeeTest(BitcoinTestFramework):
         test_notmine_bumpfee_fails(self, rbf_node, peer_node, dest_address)
         test_bumpfee_with_descendant_fails(self, rbf_node, rbf_node_address, dest_address)
         test_dust_to_fee(self, rbf_node, dest_address)
-        test_settxfee(self, rbf_node, dest_address)
         test_watchonly_psbt(self, peer_node, rbf_node, dest_address)
         test_rebumping(self, rbf_node, dest_address)
         test_rebumping_not_replaceable(self, rbf_node, dest_address)
@@ -90,6 +89,7 @@ class BumpFeeTest(BitcoinTestFramework):
         test_bumpfee_metadata(self, rbf_node, dest_address)
         test_locked_wallet_fails(self, rbf_node, dest_address)
         test_change_script_match(self, rbf_node, dest_address)
+        test_settxfee(self, rbf_node, dest_address)
         test_maxtxfee_fails(self, rbf_node, dest_address)
         # These tests wipe out a number of utxos that are expected in other tests
         test_small_output_with_feerate_succeeds(self, rbf_node, dest_address)
@@ -281,9 +281,15 @@ def test_settxfee(self, rbf_node, dest_address):
     assert_greater_than(Decimal("0.00001000"), abs(requested_feerate - actual_feerate))
     rbf_node.settxfee(Decimal("0.00000000"))  # unset paytxfee
 
+    # check that settxfee respects -maxtxfee
+    self.restart_node(1, ['-maxtxfee=0.000025'] + self.extra_args[1])
+    assert_raises_rpc_error(-8, "txfee cannot be more than wallet max tx fee", rbf_node.settxfee, Decimal('0.00003'))
+    self.restart_node(1, self.extra_args[1])
+    rbf_node.walletpassphrase(WALLET_PASSPHRASE, WALLET_PASSPHRASE_TIMEOUT)
+
 
 def test_maxtxfee_fails(self, rbf_node, dest_address):
-    self.log.info('Test that bumpfee fails when it hits -matxfee')
+    self.log.info('Test that bumpfee fails when it hits -maxtxfee')
     # size of bumped transaction (p2wpkh, 1 input, 2 outputs): 141 vbytes
     # expected bump fee of 141 vbytes * 0.00200000 BTC / 1000 vbytes = 0.00002820 BTC
     # which exceeds maxtxfee and is expected to raise
diff --git a/test/functional/wallet_multiwallet.py b/test/functional/wallet_multiwallet.py
index 78ead514a..d2bdc6fe1 100755
--- a/test/functional/wallet_multiwallet.py
+++ b/test/functional/wallet_multiwallet.py
@@ -6,6 +6,7 @@
 
 Verify that a bitcoind node can load multiple wallet files
 """
+from decimal import Decimal
 import os
 import shutil
 import time
@@ -193,9 +194,9 @@ 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")