{"id":6087,"date":"2024-10-09T07:44:49","date_gmt":"2024-10-09T07:44:49","guid":{"rendered":"https:\/\/finderica.com\/banks-that-have-cut-or-eliminated-overdraft-fees\/"},"modified":"2024-10-09T07:44:49","modified_gmt":"2024-10-09T07:44:49","slug":"banks-that-have-cut-or-eliminated-overdraft-fees","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6087","title":{"rendered":"Banks that have cut or eliminated overdraft fees"},"content":{"rendered":"\n<div class=\"ArticleBody js-ArticleBody\">\n<div id=\"79699877-6328-437b-84aa-fb1f94ff2c83\" class=\"KeyTakeaways border-solid border-l-2 pl-4 mb-12 sm:mb-8 relative KeyTakeaways--blue-colors\">\n    <!-- htmlmin:ignore --><\/p>\n<h2 class=\"KeyTakeaways-title type-heading-four mb-6\">\n    Key takeaways<br \/>\n<\/h2>\n<p><!-- htmlmin:ignore --><\/p>\n<ul class=\"KeyTakeaways-items List flex flex-col text-gray-700 text-lg font-sans mb-0\">\n<li class=\"KeyTakeaways-item pl-6 ml-3 relative mb-3\">\n                        An overdraft fee is charged when you don\u2019t have enough money in your bank account to cover a debit &#8212; the average charge is around $29.\n                    <\/li>\n<li class=\"KeyTakeaways-item pl-6 ml-3 relative mb-3\">\n                         Some banks deny transactions when you don\u2019t have enough funds to cover them.\n                    <\/li>\n<li class=\"KeyTakeaways-item pl-6 ml-3 relative mb-3\">\n                         Some banks offer a 24-hour grace period to restore your account to a positive amount.\n                    <\/li>\n<li class=\"KeyTakeaways-item pl-6 ml-3 relative mb-3\">\n                         Many banks are moving away from charging overdraft fees, helping you avoid the costly fee entirely.\n                    <\/li>\n<\/ul>\n<\/div>\n<p>Overdraft fees are becoming less of a headache for many bank customers, as more banks move to reduce or eliminate such fees. The trend comes at a time of increased pressure from federal regulators and consumer advocates to curb overdraft fees, which recently averaged more than $29 each instance, according to Bankrate\u2019s most recent checking account and ATM fee survey.<\/p>\n<div id=\"top-funnel-content-top\"><\/div>\n<div id=\"top-funnel-content-mid\"><\/div>\n<p>One bank that was ahead of the curve was Discover Bank, which has a history of not charging overdraft fees. It also which eliminated insufficient funds fees for all of its bank accounts in 2019.<\/p>\n<p>More recently, various big banks, online-only banks and credit unions have announced plans to lower overdraft fees or cut them entirely.<\/p>\n<p>We\u2019ve rounded up a list of banks with no overdraft fees or reduced fees, helping you save money in the event that you overdraw your account.<\/p>\n<h2>What are overdraft fees?<\/h2>\n<p>An overdraft fee is a fee charged by your bank when you make a transaction that causes your account to go negative. Banks may allow the transaction to go through, but you must pay the fee and replenish the negative amount to restore your account to good standing. In some cases, banks may deny the transaction particularly if you make a debit card transaction without enough money to cover it.<\/p>\n<p>Some banks provide a 24-hour grace period, allowing you to restore your account within 24 hours without getting charged the fee. But since overdraft fees can get costly, you may want to look at banks that don\u2019t charge overdraft fees to avoid the fee entirely. In some cases, banks with overdraft fees will allow you to link your savings account to a checking account so that it can pull from your savings if you ever overdraw your account.<\/p>\n<h2 data-beam-element-viewed data-id=\"br-h2-second-onpage-placement\" data-type=\"h2\" data-location=\"Banking, Checking\" data-position=\"h2_second_placement\" data-name=\"h2_second_placement\" data-text=\"Banks that have cut overdraft fees\" data-outcome>Banks with no overdraft fees or reduced overdraft fees<\/h2>\n<h3>Alliant Credit Union<\/h3>\n<p>Alliant Credit Union stopped charging overdraft and nonsufficient funds (NSF) fees in 2023. 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.<\/p>\n<p>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.<\/p>\n<h3>Ally Bank<\/h3>\n<p>Ally Bank eliminated overdraft fees during the COVID-19 pandemic in 2020. The online bank subsequently made the change permanent. In cases where a transaction is declined that would otherwise overdraw the account, the bank does not charge a fee.<\/p>\n<p>Ally also provides a CoverDraft service, which provides a safety net of up to $250 for overdrawn accounts of customers who qualify. If you overspend, your next deposit will be applied automatically to the negative balance.<\/p>\n<h3>Bank of America<\/h3>\n<p>In 2023, 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 also eliminated the $12 overdraft protection transfer fee through its Balance Connect linked accounts program.<\/p>\n<p>Bank of America earned $392 million in revenue from overdraft and NSF fees in 2023, according to the <a href=\"https:\/\/www.consumerfinance.gov\/data-research\/research-reports\/data-spotlight-overdraft-nsf-revenue-in-q4-2023-down-nearly-50-versus-pre-pandemic-levels\/full-report\/#:~:text=For%20the%20full%20year%202022,%2411.97%20billion%20reported%20in%202019.\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"Consumer Financial Protection Bureau\" data-type=\"LINK\" data-position=\"10\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">Consumer Financial Protection Bureau<\/a> (CFPB), a U.S. government agency that enforces federal consumer financial laws.<\/p>\n<p>In July 2023, the CFPB stated that Bank of America had participated in illegal activities that included double-dipping on NSF fees. In all, the CFPB ordered the bank to pay $250 million in fines and compensation to settle multiple claims.<\/p>\n<h3>BECU (Boeing Employees Credit Union)<\/h3>\n<p>BECU reduced its overdraft fees to $10 from $25 in October 2023, and it also did away with NSF fees for items returned or rejected due to an insufficient available balance.<\/p>\n<h3>BMO Harris<\/h3>\n<p>BMO Harris eliminated NSF fees and overdraft transfer fees in 2023, and it cut overdraft fees by more than a half \u2014 to $15 for each occurrence. The fee changes applied to both consumer and small business accounts. The maximum number of overdraft fees a customer may incur per day is three.<\/p>\n<h3>Capital One<\/h3>\n<p>In early 2023, 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.<\/p>\n<p>Customers can also choose alternative options, such as having transactions declined that would result in overdrafts or having funds transferred from a linked account when an overdraft would otherwise occur.<\/p>\n<p>The bank also stopped charging NSF fees in 2023.<\/p>\n<h3>Citibank<\/h3>\n<p>In June 2023, Citibank eliminated fees associated with overdrafts, overdraft protection, NSF and returned items. In making the changes, it became the largest bank to do away with overdraft fees.<\/p>\n<p>Having a linked savings account or a Citi line of credit can enable customers to have funds transferred automatically to a checking account in the event of a negative balance.<\/p>\n<h3>Citizens Bank<\/h3>\n<p>Citizens Bank implemented an overdraft fee grace period in 2023, which allows customers with an overdrawn account to avoid overdraft fees if the account is brought back to a positive balance by the end of the next business day. When overdraft fees are assessed, they are $35 per item paid, and a maximum of five such fees may be charged per day.<\/p>\n<p>One of the checking accounts offered by Citizens Bank is its EverValue Checking, which may be a good option for anyone who doesn\u2019t want overdraft coverage. Transactions are simply declined that would otherwise overdraw the account.<\/p>\n<h3>Fifth Third Bank<\/h3>\n<p>In June 2023, Fifth Third Bank eliminated NSF fees for all consumer accounts. The bank charges a fee of $37 for each overdraft, with a maximum of three overdraft fees to be charged per day. These fees are not assessed on individual items of $5 or less; nor are they charged for accounts overdrawn by $5 or less at the end of a business day.<\/p>\n<h3>Huntington Bank<\/h3>\n<p>Huntington Bank reduced overdraft and NSF fees in July 2023 to $15 per occurrence. It also reduced the number of times customers can be charged these fees to three per day. The bank won\u2019t charge fees on an account that\u2019s overdrawn by less than $50.<\/p>\n<h3>KeyBank<\/h3>\n<p>In 2023, KeyBank reduced its overdraft fee to $20 for each occurrence and capped the number of overdraft charges at three each day. Overdraft fees are not charged when accounts are overdrawn by less than $20, and NSF fees are no longer assessed.<\/p>\n<h3>PNC Bank<\/h3>\n<p>In 2023, PNC Bank eliminated NSF fees for all consumer deposit account customers. The bank had already stopped charging these fees for its Virtual Wallet deposit accounts in 2023.<\/p>\n<p>Virtual Wallet customers also have access to the \u201cLow Cash Mode\u201d feature, which provides a limit on overdraft fees to one $36 fee per day. Those who use Low Cash Mode also receive low balance alerts and at least a 24-hour grace period to add funds to avoid overdraft fees. During the grace period, they can also process or decline payments that may otherwise result in overdrafts and fees.<\/p>\n<h3>Regions Bank<\/h3>\n<p>In 2023, Regions Bank eliminated NSF fees and capped its $36 overdraft fee at three instances per day. The bank also no longer charges an overdraft protection fee when funds are transferred automatically between linked accounts to cover overdrafts.<\/p>\n<p>In addition, Regions has enacted Regions Overdraft Grace. This grace period allows customers a chance to bring their account balance back to $0 by the end of the next business day, without being assessed an overdraft fee.<\/p>\n<h3>Santander Bank<\/h3>\n<p>Santander Bank increased its no-fee overdraft threshold to $100 in 2023, so that accounts overdrawn by less than that amount won\u2019t incur fees. The bank made additional changes to its overdraft fee structure, including reducing the number of $35 fees that could be charged each day for covered overdrafts and returned items and eliminating its $12 overdraft protection fee, which had been charged when funds were moved automatically between accounts to avoid overdrafts. Then, in 2023, the bank also reduced its overdraft fee from $35 to $15, helping customers pay less in overall fees.<\/p>\n<h3>Truist Bank<\/h3>\n<p>Truist Bank now offers two personal checking accounts that don\u2019t charge overdraft fees, including the Truist One account, which provides qualifying customers with a $100 negative balance buffer.<\/p>\n<p>The Truist Confidence Account doesn\u2019t charge fees for overdrafts, returned items or overdraft protection transfers. Transactions that exceed the account balance will typically be declined or returned.<\/p>\n<p>Truist does not charge for overdraft protection transfers from a linked savings, checking or money market account, or from a credit card or a line of credit.<\/p>\n<h3>U.S. Bank<\/h3>\n<p>U.S. Bank stopped charging NSF fees in early 2023, and the bank increased the amount an account could be overdrawn without incurring a fee to $50 from $5. Once an account reaches a negative balance of more than $50, customers have a full day to deposit funds to avoid a fee. The overdraft fee assessed is $36 per item the bank pays on your behalf.<\/p>\n<p>U.S. Bank earned $214 million in revenue from overdraft and NSF fees in 2023, according to the CFPB.<\/p>\n<h3>Wells Fargo<\/h3>\n<p>Wells Fargo eliminated NSF and overdraft protection fees in 2023, and it also began providing customers a 24-hour grace period to cover overdrafts before incurring a fee.<\/p>\n<p>The bank\u2019s overdraft fee is $35 an item for consumer accounts, with no more than three such fees to be incurred each business day.<\/p>\n<p>Wells Fargo earned $937 million in overdraft and NSF revenue in 2023, according to the CFPB.<\/p>\n<h2><b>What banks earn in overdraft fees<\/b><\/h2>\n<p>Across 2023, banks earned $5.8 billion in combined <a href=\"https:\/\/www.consumerfinance.gov\/data-research\/research-reports\/data-spotlight-overdraft-nsf-revenue-in-2023-down-more-than-50-versus-pre-pandemic-levels-saving-consumers-over-6-billion-annually\/\" data-beam-element-clicked=\"ElementClicked\" data-location=\"content body\" data-text=\"revenue for overdraft and NSF fees\" data-type=\"LINK\" data-position=\"28\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\" rel=\"nofollow noopener\" target=\"_blank\">revenue for overdraft and NSF fees<\/a>, compared with nearly $12 billion in 2019, according to the CFPB. This decrease of 51 percent is likely related in part to the changes in bank policies.<\/p>\n<p>The CFPB report broke down overdraft and NSF revenue in 2023 by bank and listed JP Morgan Chase as earning the highest amount ($1.1 billion), followed by Wells Fargo ($937 million), PNC Bank ($258 million), Truist ($231 million), U.S. Bank ($214 million) and Regions ($211 million).<\/p>\n<h2>Banks fined for overdraft fees<\/h2>\n<p>In early 2023, the CFPB <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/consumer-financial-protection-bureau-launches-initiative-to-save-americans-billions-in-junk-fees\/\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"launched an initiative\" data-type=\"LINK\" data-position=\"29\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">launched an initiative<\/a> to reduce what it called \u201cexploitative junk fees charged by banks and financial companies\u201d by issuing industry guidance as well as crafting and enforcing rules. The agency <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/blog\/hidden-cost-junk-fees\/\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"describes junk fees\" data-type=\"LINK\" data-position=\"30\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">describes junk fees<\/a> as those that are \u201cexcessive,\u201d and examples include overdraft fees, return fees, late penalties and out-of-network ATM fees.<\/p>\n<p>The CFPB <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/cfpb-orders-regions-bank-pay-191-million-for-illegal-surprise-overdraft-fees\/\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"ordered Regions Bank\" data-type=\"LINK\" data-position=\"31\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">ordered Regions Bank<\/a> to pay $191 million to customers in September 2023 for charging \u201cillegal surprise\u201d overdraft fees on \u201ccertain ATM withdrawals and debit card purchases\u201d between 2018 and 2023, the agency reported. In a <a href=\"https:\/\/ir.regions.com\/news-and-events\/press-releases\/2023\/09-28-2023-161114421\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"written response\" data-type=\"LINK\" data-position=\"32\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">written response<\/a>, Regions said it \u201cdisagrees with the CFPB\u2019s characterizations\u201d but would pay the fee.<\/p>\n<p>Similarly, <a href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/cfpb-orders-wells-fargo-to-pay-37-billion-for-widespread-mismanagement-of-auto-loans-mortgages-and-deposit-accounts\/\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"Wells Fargo was fined\" data-type=\"LINK\" data-position=\"33\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">Wells Fargo was fined<\/a> $3.7 billion by the CFPB in December 2023, in part for imposing \u201csurprise overdraft fees.\u201d The agency maintained the bank charged the fees to some customers even though they had adequate funds in their account at the time the bank authorized the transaction.<\/p>\n<p>\u201cI can say with certainty, unless supervision and enforcement from the CFPB coupled with legislation to not only end overdraft fees, but create a level playing field for those living on the margins exist, banks will only rebrand overdraft fees as other junk fees and the cycle will begin again,\u201d said Elyse Hicks, consumer policy analyst at Americans for Financial Reform, a nonprofit advocacy organization.<\/p>\n<h2>Legislation that would limit overdraft fees<\/h2>\n<p>The Overdraft Protection Act of 2023 was legislation introduced by former Rep. Carolyn Maloney, a Democrat from New York, which highlighted CFPB research and sought to limit the dollar amount banks can charge per overdraft fee and the frequency with which the fees could be charged.<\/p>\n<p>While the House Finance Committee <a href=\"https:\/\/www.consumerfinancemonitor.com\/2023\/08\/03\/house-committee-passes-the-overdraft-protection-act\/\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"passed the act\" data-type=\"LINK\" data-position=\"34\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">passed the act<\/a> in July 2023, <a href=\"https:\/\/ballotpedia.org\/Carolyn_Maloney\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"Maloney was defeated\" data-type=\"LINK\" data-position=\"35\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">Maloney was defeated<\/a> in her bid for reelection later in the year and the bill didn\u2019t progress further through Congress.<\/p>\n<p>Overdraft fees are a practice to which President Joe Biden has also voiced opposition. He advocated for a ban on \u201cjunk fees\u201d during his State of the Union address in February 2023, and he subsequently released <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/presidential-actions\/2023\/03\/03\/a-proclamation-on-national-consumer-protection-week-2023\/\" target=\"_blank\" rel=\"nofollow noopener\" data-beam-element-clicked-no-delay=\"ElementClicked\" data-location=\"content body\" data-text=\"a statement\" data-type=\"LINK\" data-position=\"36\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\">a statement<\/a> that his administration was \u201ccracking down on those unfair, hidden \u2018junk fees\u2019 like bank overdraft charges\u2026\u201d<\/p>\n<p>Critics of such legislation have argued that consumers who overdraw an account are hurt more by having transactions declined than by overdrafting and paying the resulting fee. Speaking before a <a href=\"https:\/\/financialservices.house.gov\/calendar\/eventsingle.aspx?EventID=408298\" data-beam-element-clicked=\"ElementClicked\" data-location=\"content body\" data-text=\"House Financial Services Committee hearing in March\" data-type=\"LINK\" data-position=\"37\" data-name=\"article-link\" data-outcome=\"EXTERNALLINK\" rel=\"nofollow noopener\" target=\"_blank\">House Financial Services Committee hearing in March<\/a>,\u00a0Todd Zywicki, law professor at George Mason University, said he questioned whether regulatory intervention might ultimately harm consumers, especially those who are more vulnerable.<\/p>\n<p>If a law were in place to eliminate or curb overdraft fees, those who overdraw their accounts \u201cwill have many more bounced checks, declined payments, and will likely end up having to rely more on payday lenders and other alternative financial providers,\u201d Zywicki told Bankrate.<\/p>\n<h2>What having a bank with no overdraft fees means for you<\/h2>\n<p>Some banks with no overdraft fees simply decline any transaction that otherwise would have overdrawn your account. If you\u2019d rather avoid having a transaction declined, an alternative may be to set up overdraft protection. This service can allow funds to be transferred automatically from your savings account to your checking to keep it from being overdrawn.<\/p>\n<p>If your bank currently charges overdraft fees and you want to avoid them, it\u2019s easy to find another bank that doesn\u2019t charge them, thanks to the growing list of institutions that have eliminated such fees.<\/p>\n<p>Other factors consumers commonly consider when shopping for a new bank include high-yield savings account rates and whether a free checking account is offered.<\/p>\n<p>Various financial institutions \u2014 such as Varo Bank and Chime \u2014 also offer perks like access to your direct deposit up to two days earlier than many traditional banks.<\/p>\n<h2>Bottom line<\/h2>\n<p>Overdraft policies vary among banks, whether they charge a fee for overdrafts, decline overdrafts and charge no overdraft fee, or allow a grace period before charging a fee. It can pay to shop around for a bank with no overdraft fee, as well as to take advantage of tools like low-balance alerts to help avoid overdrawing your account.<\/p>\n<p><em>\u2013Freelance writer Sarah George contributed to updating this article.<\/em><\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/www.bankrate.com\/banking\/checking\/banks-eliminated-overdraft-fees\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key takeaways An overdraft fee is charged when you don\u2019t have enough money in your bank account to cover a debit &#8212; the average charge is around $29. Some banks deny transactions when you don\u2019t have enough funds to cover them. Some banks offer a 24-hour grace period to restore your account to a positive<\/p>\n","protected":false},"author":1,"featured_media":6088,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[218],"tags":[406,419,766,421,767],"class_list":{"0":"post-6087","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-banking","8":"tag-banks","9":"tag-cut","10":"tag-eliminated","11":"tag-fees","12":"tag-overdraft"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/6087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6087"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/6087\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/6088"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}