ADVERTISER DISCLOSURE

Overdraft Fees: A Guide to What Banks Charge

by

Overdraft fees aren’t just limited to those of us living paycheck-to-paycheck. These charges can strike anyone, at any time, but they are easily avoided with careful management of your personal finances. Unfortunately, mistakes still happen and chances are you’ll still face an overdraft fee at some point in your lifetime. In that case, it’s helpful to know just how much you could be paying, and how to limit the impact on your budget.

Overdraft fees can be a confusing affair, made worse by the fact that banks often profit greatly from them. In recent years, the government has stepped in to stop banks from automatically enrolling customers in overdraft coverage, but the “service” is still largely misunderstood by consumers. Not surprisingly, this lack of information often leads to more fees. Resources like helpwithmybank.gov provide answers to some common questions, but here is some of the most critical information you need to know.

When you sign up for a checking account, you generally have 1 of 3 options regarding overdrafts:

  1. Opt out – Transactions that will result in a negative balance are rejected at the point of sale, meaning no fee but also no purchase. Keep in mind that bounced checks and recurring automatic payments could still cause a fee.
  2. Opt in – overdraft coverage – The bank can choose to process transactions with insufficient funds, but charge an overdraft fee for the convenience, meaning your debit card won’t be declined at the register, but you will face a hefty fine.
  3. Opt in – overdraft protection -The bank will automatically transfer funds over from a linked account (usually savings) to cover a transaction. A fee still applies, but it’s usually much lower (about $10-$12 per instance)

Read more about these three options and how to avoid overdraft fees here.

We’ve analyzed overdraft fees and policies at some of the biggest banks in the country to help you quickly understand what you might encounter.

Banks With No Overdraft Fee

Capital One 360 | 360 Checking
Capital+One+360
  • $50 cash bonus for new accounts
  • Access to over 38,000 surcharge-free Allpoint ATMs
  • Use a mobile app or computer to deposit checks from anywhere with CheckMate
  • No foreign transaction fee
Monthly Fee Minimum Balance APY
$0.00 $0.00 0.20%

Capital One 360 (an online bank) takes a different approach when it comes to overdrafts. Rather than charging an exorbitant fee for spending more money than you have available, they treat the transaction more like a short-term loan. You’ll pay a small amount of interest on the negative balance until you repay what you “borrowed” – very much like a credit card!

Overdraft Fees at Top U.S. Banks

Bank Overdraft Fee Max Fees per Day Overdraft Protection Transfer
Bank of America $35 4 $10.00
Note: Extended overdraft fee of $35 charged when account remains overdrawn for 5 consecutive business days
BB&T $36 6 $12.50
Note:

  • No overdraft fees if account is overdrawn by $5 or less at the end of the day
  • Extended overdraft fee: $36 charged when account remains overdrawn for 5 consecutive business days
 Capital One $35 4 $10.00
Note: No overdraft fees if account is overdrawn by $5 or less at the end of the day
Capital One 360  $0  N/A N/A
 Chase $34 3 $10.00
Note:

  • No overdraft fees if account is overdrawn by $5 or less at the end of the day
  • No fee if purchase item is $5 or less
  • Extended overdraft fee: $15 charged when account remains overdrawn for 5 consecutive business days
Citibank $34 4 $10.00
 PNC $36 4 $10 .00
Note:

  • No overdraft fees if account is overdrawn by $5 or less at the end of the day
  • Extended overdraft fee: $7 charged each day after an account remains overdrawn for 5 consecutive business days (max $98)/em>
SunTrust $36 6 Overdraft items, 6 Returned items $12.50
Note:

  • No overdraft fee if purchase item is $5 or less
  • Extended overdraft fee: $36 charged when account remains overdrawn for 7 consecutive business days
TD Bank  $35  5 $10.00
Note:

  • No overdraft fees if account is overdrawn by $5 or less at the end of the day
  • Extended overdraft fee: $20 charged when account remains overdrawn for 10 consecutive business days
US Bank* $36 4 Overdraft items, 4 Returned items $12.50
Note:

  • No overdraft fee if purchase item is $5 or less
  • Extended overdraft fee: $25/week charged beginning on the 8th calendar day the account is overdrawn
Wells Fargo $35 4 $12.50
Note:

  • No overdraft fees if account is overdrawn by $5 or less at the end of the day
  • Overdraft fee: $15 for Teen Checking accounts, limited to 2 per day

*Effective beginning August 10, 2013

Already in the red?

If you’ve already been hit with an overdraft fee, the first thing you should do is try to pay back the balance as soon as possible. The fee information above clearly shows that if you neglect to take action for a few days, you could face even more fees in the form of “extended” or “sustained” overdraft fees.

If overdrawing your account is becoming more of a habit, rather than a one-time mistake, you should look into opting out. This will mean you might not be able to buy that cup of coffee in the morning, but you also won’t be paying an extra $36 for it, since your debit card will be declined. Overdraft protection plans are another option, but clearly this route isn’t exactly free either. These transactions can still run you up to $12.50 per instance and they’ll also make it that much easier to drain your savings account!

Image: MoneyBlogNewz / Flickr source

We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines, and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet's official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.
  • Robert Giltner

    PaySound a checking account more banks are offering offers no overdraft fees ever and an optional line of credit at 15% APR without a credit score.

  • Greg Schreacke

    First Federal Savings Bank uses the PaySound checking program to offer a no bank overdraft checking package to customers. We are the only bank in our market serving customer needs through a no overdraft fee every checking account.

  • Teri

    I would like to find out what the opt out option means to auto-payments through companies such as Netflix etc. i.e. There was an unexpected delay with my pay due to the holiday. When my auto-payments went through from places like Netflix, Rhapsody, Hulu etc. I ended up being charged 4 overdraft fees When I asked my bank if I could request that they decline on such transactions when I don’t have the funds, they said that they didn’t have that ability, which translates to me that they have it set up not to have that ability??

  • penprick

    Of course, the bank never makes a mistake does it? But, what happened to me once was a check got encoded for the wrong amount; $100 more than it actually was causing my balance to go negative. In a perfect world, I should be able to charge the bank the same amount they charge me for an overdraft, currently $35.

  • Kass

    The banks make false statements containing your check acct. They charged me 35.00 after one day in negative, then within 5 days they will charge you again 35.00 if your acct is not paid. So they want extra 70.00 if you can’t pay. B of A is a ripe off… They taking more money than you put away.