8 Best Banks for Overdrafts

SoFi charges no overdraft fees, and customers can also opt into two different options to cover their accounts in case of an overdraft. The first option is free overdraft protection, which allows customers to transfer money from their savings balance to cover the transaction. The second option is no-fee overdraft coverage, where SoFi will cover a debit card transaction that would result in an overdraft of up to $50, as long as a customer qualifies by making $1,000 or more in direct deposits per month.

Alliant Credit Union doesn’t charge overdraft fees, and it offers two free services that customers can enroll in to cover overdrafts. The first service is overdraft protection, where customers can transfer funds from their linked Alliant savings account to cover an overdraft. With the second service, courtesy pay, Alliant will cover checks, electronic payments and transfers that extend beyond your overdraft protection. To qualify for courtesy pay, customers must be Alliant Credit Union members for six months and transfer $600 per month into their checking account. The overdraft amount must also be paid back immediately.

Axos doesn’t charge any overdraft fees; transactions are declined unless a customer is enrolled in one of Axos’ overdraft protection programs. There are two options: a free overdraft protection transfer from a linked money market or savings account, or an overdraft line of credit. The overdraft line of credit has an 18% APR, so it could be an expensive option. If a customer’s account is overdrawn from an automatic electronic transfer such as bill pay or a check, Axos may charge $25 per item, with a maximum of three charges per day.

Discover doesn’t charge any overdraft fees. If a customer writes a check or sets up an automatic payment that would result in an overdraft, customers can designate a Discover savings or money market account to use for free overdraft protection transfers. Discover’s overdraft protection service doesn’t apply to debit card transactions, ATM transactions or transfers that are initiated at Discover, however, and will decline those transactions if there aren’t enough funds available.

In June 2021, Ally removed overdraft fees from all of its accounts. If a customer is worried about accidentally overdrafting their account, there are two options for overdraft protection. The first option is to set up free overdraft protection transfers from a linked Ally savings account or money market account. The transfer will be rounded to the nearest $100 and sent to the customer’s checking account. The second option is Ally’s CoverDraft service, which provides up to $250 in coverage in case a customer overdrafts. A customer can qualify for CoverDraft for 30 days after making a $100 deposit into their checking account, which means they receive basic overdraft coverage up to $100. If a customer deposits at least $250 for two months in a row, they qualify for up to $250 in coverage. The customer’s next deposit will apply to their negative balance, and they have 14 days to bring their account back to a positive balance.

One doesn’t charge any overdraft fees or nonsufficient funds fees. If a customer deposits at least $20 into their One account, then they have access to up to $200 in overdraft coverage linked to their Spend Pocket, which is One’s version of a checking subaccount. The negative balance is automatically repaid with the next deposit a customer makes into their Spend Pocket. If the negative balance carries over to the next month, then the customer will be charged an annual percentage rate (APR) of 12%, which is a 1% interest rate per month. Customers can enable or disable the overdraft coverage feature in their Spend Pocket.

Navy Federal Credit Union has a relatively low overdraft fee of $20 per occurrence with a maximum charge of one overdraft fee per day. Customers can opt out of overdrafts — meaning a transaction will be declined if it would result in an overdraft — or customers can use two different overdraft coverage options. The first option is a free overdraft protection transfer from their savings account, and the second is a checking line of credit, which charges an interest rate from 13.9% to 17.9% APR.

Capital One doesn’t charge any overdraft fees, and customers have a few ways to handle potential overdrafts when they occur. The first option is to auto-decline any transaction that might result in an overdraft, the second option is a free transfer from a linked savings account and the third option is to enroll in No-Fee Overdraft. The latter is a program where customers authorize Capital One to consider paying transactions that would otherwise overdraft their account. To qualify for No-Fee Overdraft, customers must deposit $250 into their checking account for two out of the prior three months.