Best Checking Account for Overdraft Fee Avoidance

How we picked the companies to evaluate:

We evaluated over 90 financial institutions, including the largest U.S. retail banks based on assets and internet search traffic; the nation’s largest credit unions, based on assets and membership; and other notable and/or emerging players in the industry. We rated them on criteria including annual percentage yields, minimum balances, fees, digital experience and more. Some of the providers are NerdWallet partners, but this did not influence our selection of the winner.

How we chose the winner:

Financial institutions were rated on the following factors: Overdraft fees and nonsufficient funds fees plus availability of options that prevent overdrafts (contributed to 30% of the rating), daily limit on overdraft fees and nonsufficient funds fees (20%), overdraft line of credit (20%), continuous negative balance fee (10%), overdraft protection transfer (20%). Also, up to 20% extra credit was given for an overdraft “spot me” program that allows customers to borrow funds to cover an overdraft with no fee or interest charges. This year, we also changed our rubric to give higher star ratings to banks and credit unions that charge no overdraft fees and also provide overdraft protection options. As a result, the winners for this award category will have the lowest overdraft fees and/or ways to avoid the fees altogether. In case of a tie, banks and credit unions were compared by category in the following order until one institution remained:
  • Overall checking account star rating.
  • Banking experience, including factors like ease of website use, branch availability, customer service hours, chat support, mobile app ratings and regulatory penalties.
  • Mobile app star ratings.

How we verified our data:

NerdWallet writers and editors confirmed fees, rates, policies and other key features on each financial institution’s website. If an institution’s website was missing information, we contacted a representative directly for confirmation.