Banks That Have Cut Or Eliminated Overdraft Fees | Bankrate

overdraft fees are becoming less of a headache for many bank customers, as more and more banks move to reduce or eliminate such fees. The vogue comes at a time of increased pressure from federal regulators and consumer advocates to curb overdraft fees, which recently averaged more than $ 33 each case, according to a 2021 Bankrate survey. One bank that was ahead of the curve was Discover, which has a history of not charging overdraft fees — and which eliminated insufficient funds fees for all of its bank accounts in 2019. More recently, diverse bad banks, on-line banks and credit unions have announced plans to lower overdraft fees or cut them entirely .

Alliant Credit Union

Alliant Credit Union stopped charging overdraft and NSF fees in 2021. Members can opt in to its Courtesy Pay program, which may cover transactions that would differently not have cleared due to insufficient funds.

Members must have made deposits into the bill of at least $ 600 within the past 30 days to qualify for the program, in addition to meet early requirements .

Ally Bank

Ally Bank eliminated overdraft fees during the COVID-19 pandemic in 2020. The on-line bank subsequently made the switch permanent. In cases when a transaction is made that overdraws an account, the bank may cover the overdraft up to $ 250 — at the trust ’ south discretion — or decline the transaction. No fee is charged in either scenario .

Bank of America

In January 2022, Bank of America — the state ’ s irregular largest bank by assets — said customers would no longer be charged nonsufficient funds ( NSF ) fees, beginning in February. Starting in May, Bank of America said it would reduce overdraft fees to $ 10 from $ 35 and eliminate the $ 12 overdraft security transfer fee through the bank ’ sulfur Balance Connect linked accounts plan .

Capital One

capital One said in December 2021 that it would stop charging overdraft fees, which ended an annual gross stream of an calculate $ 150 million. Those enrolled in Capital One ’ mho overdraft services were automatically converted to a no-fee overdraft option. Customers can besides choose option options, such as having transactions declined that would result in overdrafts or having funds transferred from a linked account when an overdraft would otherwise happen. In August 2021, the deposit besides eliminated NSF fees and restrict overdraft fees to one a sidereal day .


The state ’ s fourth largest deposit said in February 2022 that it plans to do away with fees associated with :

  • Overdrafts
  • Overdraft protection
  • Nonsufficient funds
  • Returned items

The changes are due to take effect in the summer of 2022, according to the bank .

Citizens Bank

Citizens Bank implemented an overdraft tip grace time period in October 2021, which allows customers with an overdraw account to avoid overdraft fees if the report is brought back to a positivist symmetry by the end of the following business sidereal day. When the seemliness period was implemented, the bank besides announced plans to roll out a no-overdraft-fee check explanation in 2022 .


KeyBank said in April 2022 that by year-end it plans to reduce its overdraft fee to $ 20 for each happening and cap the number of overdraft charges at three each day. KeyBank besides said it plans to :

  • Drop overdraft fees when accounts are overdrawn by less than $20
  • Eliminate NSF fees
  • Provide free overdraft protection for linked accounts

PNC Bank

In April 2021, PNC Bank said it would no long charge NSF fees and charge no more than one $ 36 overdraft fee each day. At the same time, PNC besides introduced its low cash manner feature, which alerts customers to abject account balances and provides a 24-hour grace period during which customers can add funds to avoid an overdraft fee. During the grace period, customers can besides decide to process or decline payments they ’ rhenium making that differently might result in overdrafts and fees .

Regions Bank

In January 2022, Regions Bank said that in come months it would eliminate NSF fees and cap overdraft fees at three a sidereal day. It besides announced plans to no long charge an overdraft auspices fee when funds are automatically transferred between linked accounts to cover overdrafts .

Santander Bank

Santander Bank increased its no-fee overdraft brink to $ 100 in November 2021, so that accounts overdrawn by less than that come won ’ metric ton receive fees. The bank made extra changes to its overdraft fee structure, including reducing the number of $ 35 fees that could be charged each day for cover overdrafts and returned items and eliminating its $ 12 overdraft protection fee, which had been charged when funds were moved automatically between accounts to avoid overdrafts.

Truist Bank

In January 2022, Truist Bank announced plans to introduce two overdraft-free personal check accounts in the summer, including the Truist One account, which besides provides qualifying customers with a $ 100 negative balance buff and a deposit-based line of credit of up to $ 750. The depository financial institution besides said that in advent months it would do away with fees for render items, negative account balances and overdraft protective covering transfers for all existing personal accounts .

U.S. Bank

U.S. Bank stopped charging nonsufficient funds fees in January 2022, detailing the change in its fourth-quarter earnings let go of. It besides said that by June 30, it would increase the come an account could be overdrawn without incurring a fee to $ 50 from $ 5. once an account reaches a negative balance wheel of more than $ 50, customers have a fully day to deposit funds to avoid a fee .

Wells Fargo

Wells Fargo said in January 2022 that it would eliminate NSF and overdraft protection fees, and that late in the year begin providing customers a 24-hour grace period to cover overdrafts before incurring a fee. The bank ’ south overdraft tip is $ 35 an item for consumer accounts, with no more than three such fees to be incurred each occupation sidereal day. Wells Fargo earned $ 1 billion in overdraft and NSF gross from January through September 2021, according to the Consumer Financial Protection Bureau ( CFPB ) .

What banks earn in overdraft fees

Though many banks have eliminated or reduced overdraft fees since 2019, in that year banks jointly charged $ 15.5 billion in overdraft and NSF fees, according to the CFPB. More recently, respective big banks received hundreds of millions of dollars in tax income from such fees during a nine-month time period in 2021. The CFPB would consider “ a range of regulative interventions … quite than allowing large institutions to rely on trash fees constantly, ” the agency said in a December 2021 affirmation. The CFPB describes debris fees as those that are “ excessive, ” and examples include overdraft fees, return fees, late penalties and out-of-network ATM fees. Mergers have decreased rival among banks, giving them less incentive to lower their fees, according to Elyse Hicks, consumer policy analyst at Americans for Financial Reform, a nonprofit organization advocacy administration. “ I can say with certainty, unless supervision and enforcement from the CFPB coupled with legislation to not only end overdraft fees, but create a tied play field for those living on the margins exist, banks will entirely rebrand overdraft fees as early trash fees and the cycle will begin again, ” Hicks said in an e-mail .

Pending legislation

Introduced by Rep. Carolyn Maloney, a Democrat from New York, the Overdraft Protection Act of 2021 highlights CFPB inquiry and seeks to limit the dollar sum banks can charge per overdraft tip and the frequency with which the fees can be charged. specifically, the pending legislation would require that the amount charged for an overdraft be “ reasonable and proportional ” to the sum of the overdraft and the price of processing it. It besides would limit the total of overdraft fees an account could be charged to one a month and six a year. “ overdraft fees are predaceous and stumble hardest those who can least afford them — cash-strapped hard-working Americans and college students who are struggling to pay their bills, keep a roof over their heads and food on the table, ” Maloney said in an e-mail. “ It ’ s not mighty for a $ 10 sandwich at a bodega to cost about $ 50 because of a $ 35 overdraft charge — my Overdraft Protection Act stops this. ” Critics of the bill have argued that consumers who overdraw an report are hurt more by having transactions declined than by overdrafting and paying the resulting tip. Speaking before a House Financial Services Committee hearing in March, Todd Zywicki, law professor at George Mason University, said he questioned whether regulative interposition might ultimately damage consumers, specially those who are more vulnerable. If a law were in put to eliminate or curb overdraft fees, those who overdraw their accounts “ will have many more bounce checks, declined payments, and will probably end up having to rely more on payday lenders and early alternative fiscal providers, ” Zywicki told Bankrate .

What cutting overdraft fees means for you

Some banks that have eliminated overdraft fees nowadays simply decline any transaction that otherwise would have overdrawn your account. If you ’ d rather avoid having a transaction declined, an alternative may be to set up overdraft security. This service can allow funds to be transferred automatically from your savings account to your checking to keep it from being overdrawn.

If your bank presently charges overdraft fees and you want to avoid them, it ’ sulfur easy to find another bank that doesn ’ metric ton charge them, thanks to the growing number of institutions that have eliminated such fees. early factors consumers normally consider when shop for a new bank include savings account rates and whether a free check account is offered. diverse banks — such as Varo Bank and Chime — besides offer perks like entree to your direct deposit improving to two days earlier than many traditional banks .

Bottom line

Overdraft policies vary among banks, whether they charge a fee for overdrafts, worsen overdrafts and charge no tip or allow a grace period for funds to be added to an account before charging a fee. It can pay to shop around for a depository financial institution with a policy that best meets your needs, american samoa well as to take advantage of tools like low-balance alerts to help avoid overdrawing your account .

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