An overdraft fee is one of the most expensive fees banks charge, but not all banks charge the same amount. And some don’t even have 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. Some banks call the fee for a rejected transaction a nonsufficient funds fee and the fee for covering a transaction an overdraft fee, but this varies by bank. Still other banks charge multiple overdraft fees per day if you keep making transactions with a negative balance, meaning you could owe hundreds of dollars in penalties.
You can read up on the basics with our explainer on overdraft fees and options. But as a rule of thumb, it’s best not to opt into overdraft coverage for ATM or one-time debit card transactions. Your transaction will simply be declined, and you won’t be charged a fee.
Here’s a closer look at what banks charge for overdrafts.
| Banks with no overdraft fees |
| Simple NerdWallet has rated this bank:
Simple has no overdraft program, no overdraft fees and no insufficient funds fees. The mobile-optimized bank also has no account fees whatsoever and helps curb overspending with its Safe-to-Spend balance, which excludes scheduled bills and savings goals from your available balance. |
| Chime NerdWallet has rated this bank:
Chime, another nontraditional bank, also doesn’t let you overdraw your account; it has no overdraft or nonsufficient funds fees. Instead, any payments or withdrawals that would result in a negative balance are rejected. |
| Easy to avoid overdraft fees |
|
Capital One 360 NerdWallet has rated this bank:
Capital One 360 lets you opt into an overdraft line of credit with a variable rate and no annual or sign-up fee. You only pay interest on the overdrawn amount, no fixed fee. There are other options too: free transfers from a linked Capital One 360 savings account and more conventional overdraft coverage at $35 per charge, which has a one-day grace period. If you don’t opt into these services, your transactions will be declined by the bank, free of charge except a $9 fee for any returned checks. |
| Discover Bank NerdWallet has rated this bank:
With Discover, you can link a qualifying savings or money market account for free transfers if you don’t have enough cash in your checking account. Otherwise, the bank charges a $30 fee for insufficient funds a maximum of once per day, a lower limit than many banks. |
| TIAA Bank NerdWallet has rated this bank:
The online financial institution TIAA has a free overdraft protection transfer service by linking an account. Outside of this, you’d pay a $30 nonsufficient funds fee, up to two per day, for transactions that cause overdrafts, except for one-time debit card and ATM transactions. |
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Charles Schwab NerdWallet has rated this bank:
This investment brokerage’s checking account doesn’t have fees for overdraft protection services. When you overdraft with your debit card, Schwab automatically pulls money from your linked Schwab One brokerage account or your Schwab savings account for free. Its overdraft protection doesn’t extend to electronic withdrawals and payments. Those trigger a $25 nonsufficient funds fee, up to $100 a day. |
Overdraft fees by bank
| Financial institution | Overdraft coverage fee (per item) | Max fees per day | Total possible cost in a day |
|---|---|---|---|
| Alliant Credit Union | $28 | Unlimited | No limit |
| Ally Bank | $25 | 1 | $25 |
| Associated Bank | $35 | 4 | $140 |
| Bank of America | $35 | 4 | $140 |
| BB&T | $36 | 6 | $216 |
| BBVA Compass | $38 ($32 in Calif.) | 6 | $228 ($192) |
| BMO Harris Bank | $36 | 4 | $144 |
| Boeing Employees Credit Union | $25 | 5 | $125 |
| Chase | $34 | 3 | $102 |
| Citibank | $34 | 4 | $136 |
| Citizens Bank | $35 | 7 | $245 |
| Comerica | Up to $38 | 5 | Up to $190 |
| Connexus Credit Union | $29.95 | No maximum number; up to $300 negative balance | -- |
| Consumers Credit Union | $30 | Unlimited | No limit |
| Fifth Third Bank | $37 | 5 | $185 |
| HSBC Bank | $35 | 3 | $105 |
| KeyBank | Up to $39 | 5 | Up to $195 |
| M&T Bank | $38.50 | 5 | $192.50 |
| Nationwide | $25 | 6 | $150 |
| Navy Federal Credit Union | $20 | 3 | $60 |
| PNC Bank | $36 | 4 | $144 |
| Regions Bank | $36 | 6 | $216 |
| Santander Bank | $35 | 6 | $210 |
| SunTrust | $36 | 6 | $216 |
| TD Bank | $35 | 5 | $175 |
| Union Bank | $33 | 5 | $165 |
| USAA | $25 | 2 | $50 |
| U.S. Bank | $36 | 4 | $144 |
| Wells Fargo | $35 | 3 | $105 |
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 $7 sandwich with $2 in your account, you’d be exempt from a fee.
Other overdraft programs
Outside of the banks without overdraft coverage fees, you can generally find a cheaper overdraft service at your bank called 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, though it can be cheaper.
» Looking for a savings account with low fees and good rates? Read NerdWallet’s list of best savings accounts
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.
Spencer Tierney is a staff writer at NerdWallet, a personal finance website. Email: spencer@nerdwallet.com. Twitter: @SpencerNerd.
