Banks That Have Cut Or Eliminated Overdraft Fees

Overdraft fees are becoming less of a burden for many bank customers as more financial institutions move to reduce or eliminate these charges entirely. This trend reflects increased pressure from federal regulators and consumer advocates to curb fees that can impact customers’ finances.

The average overdraft fee is around $27.08 per transaction according to Bankrate’s most recent checking account and ATM fee survey. However, a growing number of banks now offer accounts with no overdraft fees or have implemented grace periods and reduced fee structures to help customers avoid these costly charges.

If you’re tired of paying overdraft fees, switching to one of these banks could save you hundreds of dollars annually while providing the same banking services with better fee structures.

New to overdraft fees? Learn how they work and strategies to avoid them with Bankrate’s complete guide to overdraft fees.

Banks with no overdraft fees or reduced overdraft fees

Alliant Credit Union

Alliant Credit Union stopped charging overdraft and nonsufficient funds (NSF) fees in 2021. Members who have accounts in good standing may qualify for the Courtesy Pay program, under which the credit union may cover checks or ACH electronic transactions that otherwise would have not cleared due to insufficient funds.

As part of its Extended Courtesy Pay program, Alliant may also cover debit card transactions that would have otherwise overdrawn an account. When transactions are covered through the Courtesy Pay programs, the full amount of the overdraft balance will be due immediately.

Ally Bank

Ally Bank eliminated overdraft fees during the COVID-19 pandemic in 2020 and made the change permanent in June 2021. When transactions would overdraw an account, the bank simply declines them without charging fees.

Ally provides a CoverDraft service offering up to $250 coverage for qualifying customers who overspend. Your next deposit automatically applies to any negative balance, providing a safety net without penalty fees.

Bank of America

In 2022, Bank of America stopped charging NSF fees and reduced overdraft fees to $10 from $35. No more than two overdraft fees may be charged in a day. The bank limits overdraft fees to two per day and eliminated the $12 overdraft protection transfer fee through its Balance Connect program.

BECU (Boeing Employees Credit Union)

BECU reduced its overdraft fees to $10 from $25 in October 2022, and it also did away with NSF fees for items returned or rejected due to an insufficient available balance. These changes apply to both consumer and business checking accounts.

BMO Harris

BMO Harris eliminated NSF fees and overdraft transfer fees in 2022, and it cut overdraft fees by more than a half — to $15 for each occurrence. This cuts overdraft charges to $15 per incident with a limit of three per day.

Capital One

In early 2022, Capital One stopped charging overdraft fees, which ended an annual revenue stream of an estimated $150 million. Prior to that, the bank charged a $35 overdraft fee for those enrolled in its next-day grace period program.

Now, eligible 360 Checking accounts offer free overdraft protection: Transactions can either be declined or covered via automatic transfers from a linked savings account — both without fees. The bank also stopped charging NSF fees in 2021.

Chime

Chime’s SpotMe, launched in September 2019, allows eligible checking account users to overdraft up to $100 (or more over time) without fees. As of October 2024, SpotMe had covered over $30 billion in transactions, and limits can grow to over $200 based on account activity, direct deposits and tenure. The platform also introduced MyPay in 2024, enabling fee-free early wage access up to $500.

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