When you’re low on funds and overdraw from your bank account, it can really feel like a kick in the teeth because you’re already tight on cash and then have to pay an extra fine.
Of course, from the bank’s perspective, it makes sense to have some sort of measure in place. If they didn’t, what would stop people from impulse buying? Or running amok every day using their debit card as if it were a credit card?
But it’s not always impulse-buying when over half of all Americans are living paycheck to paycheck. And 57% of Americans can’t write a check for $500 to cover a surprise expense.
Maybe one day the standard of living will be good enough that people won’t have to read over the fine print when choosing a bank. But, until that day comes, let’s talk about options.
If you’re worried about overdrafting, we’ve uncovered the best banks with $0 overdraft fees.
Top 11 Checking Accounts with No Overdraft Fees
- No credit check
- No monthly service fees
- 100% reimbursement of ATM fees
- No overdraft fees
Axos Bank is an online bank that offers no monthly maintenance fees, full reimbursement for fees incurred while using any ATM in the US, and some pretty competitive cash back rewards.
Axos has zero overdraft fees for people who spend more than what is in their checking account.
If you are looking for a checking account with no fees, Axos Bank is a strong choice.Overview
- No credit check
- Up to 2.00% APY
- No account fees
- Over 55,000+ fee-free ATMs
- Get paid up to 2 days early
The SoFi Checking and Savings account has no overdraft fees, no minimum balance fees, and no monthly fees. Plus, it offers 55,000+ fee-free ATMs within the Allpoint® Network. Similar to Chime and Current, you can get your paycheck up to 2 days early when you set up direct deposit.
You’ll also get a 1% APY on your checking and savings accounts and up to 15% cash back at local establishments with your SoFi debit card.Overview
Fidelity Investments is a bank that truly offers its customers zero-fee banking. If you have overdraft protection, there’s no charge to use it. However, if you don’t have overdraft protection, your card will be declined. Either way, there are no overdraft fees.
What happens when you do sign up for overdraft protection?
You can link your checking account with either a savings account or a brokerage account. Then, if and when you overdraw from your account, funds will automatically be pulled from your savings or brokerage account to cover the transaction.
Again, this all happens for free.Overview
Capital One actually does something pretty cool for overdrafts. When you overextend your online checking account, Capital One lets you borrow money that you can then pay back month-to-month at a pretty decent APR of 12.25%.
Say you go over your checking account balance by $50. You won’t be fined an overdraft fee of $35 and then be immediately harassed for the $50 the next day. Instead, you would have a $50 debt plus the pennies in interest you would owe by the end of the month.Overview
If you have a Schwab One brokerage account, Schwab will pull money from it for free if you ever overdraw your checking account.
Do know, however, that this free overdraft protection doesn’t pertain to checks or electronic withdrawals, or payments. If these cross the line, you’ll get a $25 insufficient funds fee, which can add up to $100 a day.Overview
As of July 2021, Ally Bank has eliminated overdraft fees. The Ally Bank Interest Checking Account also comes with no minimum balance requirements and no monthly maintenance fees.
You can use your Ally debit card at over 43,000 Allpoint®ATMs in the U.S. for free. Plus, this online bank reimburses up to $10 per statement cycle for fees charged at other ATMs nationwide.
Chime® has a new fee-free overdraft feature called SpotMe®. They spot members up to $200 on debit card purchases when their balance is low, with no overdraft fees.
Chime is a mobile-only banking option that allows you to get your paycheck up to two days early with direct deposit2. In addition, you get daily balance notifications and instant transaction alerts whenever you use your Chime Visa Debit Card.
To avoid paying ATM fees, you’ll need to find a specified ATM via your mobile app whenever you need cash. There are over 60,000 fee-free1 ATMs to choose from.
This checking account has no minimum balance requirements, no monthly maintenance fees, no deposit required, and no foreign transaction fees.
With the Aspiration Spend & Save account, you can earn up to 1% APY, plus you get unlimited fee-free withdrawals at over 55,000 ATMs. The minimum opening deposit is $10. Deposits are FDIC insured up to $2 million, and you can get paid up to two days early.
The Aspiration debit card is made from recycled plastic. Deposits are 100% fossil fuel-free. And they even give you the option to plant a tree with every card swipe.
Your Aspiration debit card will not allow transactions to process without sufficient funds. However, there is no fee for any accidental overdraft.
The Upgrade Rewards Checking account has no monthly fees, no ATM fees, and no transfer fees. Plus, you’ll get up to 2% cash back on everyday debit card purchases. If you use an out-of-network ATM, Upgrade will give you a rebate on up to five ATM fees per month if you meet certain conditions.
Upgrade has a bank partnership with Cross River Bank, Member FDIC. Your funds are FDIC-insured up to $250,000. You can also get up to 20% lower rate on Upgrade loans and credit cards.
Chase is one of the most popular banks in the U.S. And now, they offer an account called Chase Secure Banking with no credit check, no ChexSystems, and no overdraft fees.
Account holders also get access to over 16,000 fee-free ATMs, free online bill pay, and free money orders and cashier’s checks. With 4,700 locations across the country, this is an excellent option for anyone who prefers having access to physical branches.
Opening a Chase Secure Banking account comes with a $100 cash bonus when you use the card for 10 purchases within 60 days. Account approval is immediate and you’ll receive your debit card within days. There is a small monthly service fee of $4.95; however, there is no minimum opening deposit to get started.
Current is one of the fastest-growing mobile banking solutions in the U.S., with over one million members. However, Current is a financial technology company, not a bank. Most importantly, Current does not use ChexSystems or pull your credit report.
Some features of the Current mobile banking account include fee-free overdraft protection of up to $100, 40,000 fee-free Allpoint ATMs, and no minimum balance or hidden fees.
You can also get paid up to two days early with direct deposit and earn up to 15x points, and get cashback.
Tips to Avoid Overdrafting Your Account
Though the banks discussed above offer the best solutions, there are things you can do to lessen the likelihood of overdrawing from your account if you still choose to bank with a financial institution that charges overdraft fees.
First off, there are three things that suck up most people’s paychecks every two weeks.
- Student Debt
- Car Payments
Is this the situation you’re in?
Experts say you should never spend more than 28% of your income on housing, nor should you spend any more than 10% to 20% on transportation.
Simply put, don’t live beyond your means. Do the math before you commit. If the monthly payments mean you won’t be able to afford a fast-food run once in a while, then you can’t afford them.
Yes, there are things you can do to lessen your student debt before you matriculate, but it’s unlikely you’re in a position to take advantage of those things now. So, apart from consolidating your loans and getting into an income-based repayment plan, let’s focus on some practical things you can do to stay on top of your bank account.
1. Watch your account balances regularly
Check your accounts regularly to make sure your balances aren’t too low. If your bank has a mobile app, you can see your balance any time.
2. Set up alerts for low balances
If your bank or credit union offers to email you or send you a text alert when your balance is low, take advantage of it.
3. Use cash for all purchases
It’s certainly not convenient to go to the bank and withdraw cash every time you need to spend money.
To get around doing this, take out as much money as you can and leave just enough in to pay your mortgage, car payment, and any monthly bills you have. Leave your debit card and credit card at home, and only take just enough cash with you when you go out.
This way, your budget is a very real one. If you go over, you can’t pay for what you’re trying to purchase. It’s not stressful; it’s practical. Use your phone as a calculator, know your state’s sales tax, and you’ll be just fine.
4. Use a prepaid debit card
This is basically the same as using cash, but you have the added security that comes with a debit card. If you use a prepaid debit card, keep track of how much you have on the card by using a transaction register.
5. Record all purchases or payments in a transaction register
This sounds simple (and a bit old-fashioned), but it’s actually a powerful method to stay on top of your finances.
If you would rather not use your bank’s mobile app, you can write down every transaction in your register. If you always know how much money you have (down to the very cent), you will be far less likely to waste it on small purchases.
You can also use a mobile app for budgeting to do this automatically. But if you’re just getting started, it may be helpful to start off tracking your everyday expenses manually before having your phone do it for you.
Frequently Asked Questions
What are overdraft fees?
Most banks charge you an overdraft fee when you withdraw or spend more money from your checking account than you have. Overdraft fees vary by bank, but having a negative balance will usually cost you around $35 per transaction.
Banks and credit unions make billions of dollars in overdraft and nonsufficient funds fees every year. Fortunately, paying overdraft and nonsufficient funds fees is now optional. You can choose to completely avoid them by choosing the right checking account.
Which banks have no overdraft fees?
There are numerous checking accounts that don’t charge overdraft fees. Luckily, the list seems likely to grow even more in the years ahead. Why? A recent FICO survey found that Millennials are two to three times more likely to close all accounts and switch banks completely.
It should really come as no surprise — expensive fees.
Millennials will occupy half of the American workforce in the upcoming years, so expect more and more banks to be added to this list in the years ahead. But, until then, the banks listed above offer consumer-friendly overdraft services.
Are overdraft fees charged immediately?
If you have a checking account from a bank that charges overdraft fees, you usually have 5 to 7 days to fix your negative balance before you’re charged. However, after that, some banks will charge you an overdraft fee every day that your account is in the negative.
Some banks allow you to connect your checking account to your savings account or money market account. If you overdraft your checking, they will pull from your savings account to cover the overdraft.
How many overdraft fees can you get charged in a day?
There are no laws that specify a maximum number of fees that banks can charge for overdrafts. Each bank and credit union has its own limit on the number of overdraft fees it will charge in one day.
Most banks charge a maximum of 4 to 6 overdraft fees per day per account. However, some allow as many as 12 in one day.
Can I get overdraft fees waived?
Some banks will waive one overdraft fee per year as a courtesy. If overdrafting is something that you rarely do, contact your bank’s customer service to ask if they will waive it. If it’s something you do frequently, it’s probably time to get a checking account with no overdraft fees or set up overdraft protection as soon as possible.
How can I avoid overdraft fees?
The best way to avoid overdraft fees is by getting a checking account that doesn’t have overdraft fees like the ones we listed above. We also offer some tips below to avoid overdrafting your account.
What is overdraft protection?
Overdraft protection is a service provided by banks that ensures your transactions are covered if you have insufficient funds in your checking account. The bank will automatically move funds you have available in a linked savings account, to the overdrawn account.
You may still incur a fee for the transfer from your linked account, but it’s usually less than the overdraft fee.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
2. Early access to direct deposit funds depends on the timing of the submission of the payment ﬁle from the payer. Chime generally make these funds available on the day the payment ﬁle is received, which may be up to 2 days earlier than the scheduled payment date.