Editor’s note, March 23, 2020: Many banks and credit unions are temporarily waiving overdraft fees in response to widespread financial distress caused by the coronavirus situation. To find out if your bank or credit union is one of them, call its customer service line.
An overdraft fee is often one of the most expensive fees from a bank, but not all charge the same amount. And some banks don’t even have an overdraft fee.
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Overdraft fees by bank
|Financial institution||Overdraft coverage fee (per item)||Max fees per day||Total possible cost in a day (excludes extended overdraft fees)|
|Alliant Credit Union||$28||Unlimited||No limit|
|Bank of America||$35||4||$140|
|BBVA||$38 ($32 in Calif.)||6||$228 ($192)|
|BMO Harris Bank||$36||4||$144|
|Boeing Employees Credit Union||$25||Generally 5, may be higher with transactions involving BECU loan payments||Generally $125, may be higher with transactions involving BECU loan payments|
|Capital One 360||$0 transfer fee from linked account||N/A||N/A|
|Charles Schwab||$0 transfer fee from an overdraft source||N/A||N/A|
|Chime||No overdraft program or fees||N/A||N/A|
|Up to $38||5||Up to $190|
|Connexus Credit Union||$29.95||No maximum number; up to $300 negative balance||No limit|
|Consumers Credit Union||$30||No maximum number||No limit|
|Discover Bank||$0 transfer fee from an overdraft source||N/A||N/A|
|Fifth Third Bank||$37||5||$185|
|Navy Federal Credit Union||$20||3||$60|
|Simple||No overdraft program or fees||N/A||N/A|
|TIAA Bank||$0 transfer fee from a linked account||N/A||N/A|
What is an overdraft fee?
When a transaction drops your checking account balance below zero, a bank or credit union will choose to reject or cover the transaction. You may be charged fees in either case. The charge for a rejected transaction or check is known as a nonsufficient funds fee, while the charge for an approved transaction is called an overdraft fee. Some banks charge multiple nonsufficient funds or overdraft fees per day if you make many transactions with a negative balance, meaning you could owe hundreds of dollars in penalties.
You can read our explainer on how to avoid overdraft fees. As a rule of thumb, it’s best not to opt in to overdraft coverage for ATM or one-time debit card transactions if you think you will have issues with overdrafts. When you opt out, the negative debit or ATM transaction will be declined and you won’t be charged a fee.
Some banks don’t charge overdraft fees if an account is overdrawn by $5 or less at the end of the business day. So if you buy a $6 sandwich with $2 in your account, you would be exempt from a fee.
If you’re looking for banks with no or low overdraft fees, here are our recommendations.
Banks with low or no overdraft fees
Capital One 360
Charles Schwab Bank
Outside of the banks without any overdraft coverage fees, you can generally find a cheaper option with overdraft protection transfers.
These are opt-in programs that link a second account to your checking account. An overdraft would trigger a transfer from the second account to cover the transaction. The linked account can be a savings account, credit card, line of credit or even another checking account, depending on the bank’s policy. The cost of this transfer is around $10 or $12, although it can be cheaper. Sometimes the service is even free.
» Looking for a savings account with low fees and good rates? Read NerdWallet’s list of best savings accounts.
How to get overdraft fees waived
If you’re charged an overdraft fee, here are some ways you may be able to get it waived.
- If you don’t have a history of negative transactions, contact your bank’s customer service department and ask if they will waive it.
- Ask about forgiveness policies. Some institutions have once-a-year fee forgiveness programs for customers in good standing.
- Ask about “rewind” programs. If you have an electronic deposit scheduled for your account that would have covered the overdrawn transaction, some banks will consider waiving the fee if the deposit arrives soon enough, usually by the next morning.
Overdraft fees, especially from overdraft coverage, are some of the steepest fees that banks charge. Knowing these fees might help you consider to opt out of the programs or find cheaper overdraft alternatives that your bank offers.
» Want to learn more? Read NerdWallet’s explainer on overdraft fees for more on overdraft programs.