Banks With No Overdraft Fees: Detailed Overview

Managing your finances can be tricky, especially when unexpected fees hit your bank account. One of the more costly and sadly common ones is the overdraft fee. The good news is that many financial institutions have reduced or ditched it, freeing customers from this persistent headache.

This article highlights the leading banks with no overdraft fees. With our guide, you will be able to choose the provider who’ll never bother you with annoying overdrafts (as long as you stay within reason, of course).

Why Overdraft Fees Matter

Depending on your bank’s policy, you may be charged for each overdraft. It occurs when you don’t have enough money to cover your transaction, and it causes your balance to go negative. Even if your bank allows this operation to proceed, you must pay a fee and compensate for the amount spent.

Overdraft fees vary by bank, and some can cost you up to $40. Banks may charge it multiple times a day if the consumer continues to make transactions and overdraw their account. Others offer a grace period, enabling you to cover the negative balance without incurring any additional charges.

Such penalties can significantly impact your financial well-being and lead to several budgeting challenges. They add up quickly, starting a vicious circle of debt that makes it difficult to regain financial stability. If you plan your expenses based on your available balance, they can throw your entire financial plan off course. Finally, unpaid fees can affect your credit score.

Having read all of the above, you’re probably more than willing to make only well-informed decisions and manage your finances more carefully. You can even use different strategies to avoid overdrawing, such as setting up low-balance alerts or maintaining a buffer balance. Still, we all make mistakes from time to time, funds can get lost, and impulsive decisions can prevail over our better judgment. So, the best plan is to choose a bank with no overdraft fees or a protection program, like automatic transfers from a linked account.

Top Banks with No Overdraft Fees

While overdraft fees are back on the rise in 2024, many banks are actually moving away from charging them. It makes managing money less of a headache and allows customers to have more control over their finances.

If you’ve come here to find out what banks have no overdraft fees, we have plenty of options to offer. While Bank of America drastically reduced these charges, Capital One is going further by eliminating them.

Below, we’ll list the top banks that don’t charge overdraft fees so you can enjoy peace of mind with every transaction.

Discover

Today, you can apply for Discover bank accounts with no overdraft fees and get overdraft protection via a linked savings account. The bank stopped charging for overdraft in 2019, along with other deposit account fees. Quoting Arijit Roy, ex-VP of deposits at Discover, “It was an easy decision based on the commitment to offer the most rewarding banking products in the industry.”

You can avoid declined transactions by enrolling in Overdraft Protection or Balance+ services. The latter was announced in 2024 as a new option for fee-free discretionary overdraft coverage on everyday debit card transactions.

Capital One

In 2022, Capital One stopped charging overdraft fees. “We pay it anyway,” the bank assured its account holders. 

Today, with Capital One, you can choose among two options:

1. Enroll in the optional No-Fee Overdraft service for the bank to approve checks, electronic, or recurring debit card payments without charges.
2. Use Free Savings Transfer to link your checking account to a backup savings one, and allow the bank to make a transfer automatically when necessary.

Capital One has also eliminated NSF fees and has a decent list of benefits. For instance, the Capital One 360 Checking Account offers a straightforward approach to banking with no minimum balance requirements and no monthly service fees. Customers can earn rewards for their spending and enjoy free access to an extensive ATM network.

Chime

Chime has no overdraft fees and doesn’t require cardholders to maintain a minimum balance. It’s known for its feature SpotMe, which is available to Chime members with an active debit card. It allows you to exceed your available balance—up to a predetermined limit—providing a safety net for covering expenses when your funds are temporarily low. The limit starts at $20, but can be increased up to $200 based on account history and other factors. In 2024, Chime expanded this feature to include the Credit Builder Visa Card, extending its benefits beyond debit card purchases and cash withdrawals.

Chime has no monthly maintenance fees and minimum balance requirements. It also offers cardholders access to the Save When You Get Paid program that automatically transfers a percentage of incoming transfers or direct deposits to a savings account. Also, with the bank’s savings accounts, you can get a competitive 2.00% APY.

Alliant Credit Union

Alliant Credit Union eliminated overdraft and NSF fees in 2021. Their policy applies to all of the bank’s checking and savings accounts. You can also opt into the Courtesy Pay service, which allows the credit union to cover checks, ACH transactions, and transfers that won’t clear due to insufficient funds.

The Alliant Credit Union welcomes customers to “manage money on the go without the hassle of sneaky fees or ATM scavenger hunts.” Their High-Rate Checking Account provides a 0.25% APY with no monthly service fees or minimum balance requirements, ensuring the customers will enjoy flexible, cost-effective banking. Plus, Alliant offers free access to a vast network of ATMs nationwide.

Citibank

In 2022, Citi eliminated overdraft fees, returned item fees, and overdraft protection fees. By opting for a linked savings account, you can access a protection feature with automated transfers in case of a negative balance.

Citibank has several decent account options, competitive reward programs, flexible savings, and access to ATMs.

Did you know the Consumer Financial Protection Bureau has proposed new regulations to reduce overdraft fees? If adopted, they will take effect in October 2025.

How to Choose the Right Bank for You

If your bank charges overdraft fees, it’s easy to switch to one of the many that have already eliminated them. Their policies vary: some decline transactions or offer a grace period, while others provide robust coverage programs.

Choosing which bank has no overdraft fees and suits you best can be a tricky task. Here are 10 key tips to help you make an informed decision:

1. Research the bank’s overdraft policies.
2. Check for grace periods.
3. Evaluate account features such as automatic transfers (protection programs).
4. Consider policies regulating purposes and amounts of fees.
5. Evaluate interest rates and reward offerings.
6. Check accessibility and convenience.
7. Read customer reviews.
8. Contact the support service if you have any questions.
9. Compare multiple banks using a criteria list.
10. Choose a checking account with the best options overall.

We hope we made switching to a bank with zero overdraft fees a bit easier for you! Conduct thorough research and compare available options, and you’ll surely find a bank that aligns with your financial needs.