BEST OF
These financial institutions charge low or no overdraft fees and offer overdraft coverage options.
Edited bySara Clarke
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Overdraft fees are the fees that financial institutions charge consumers who make a transaction that costs more than the available funds in their account. The fees can be $30 or more per occurrence, and some institutions charge that fee multiple times per day if a customer continues to make transactions that overdraft their account. If a customer isn’t vigilant about watching their account balance, they could face more than $100 in fees without realizing they’ve overdrafted.
» Learn more about overdrafts with our guide to overdraft programs and fees
Some institutions have worked to create better overdraft services for customers by reducing or eliminating overdraft fees or by offering free or low-cost overdraft protection. The institutions on this list have created consumer-friendly overdraft policies and have strong overall star ratings for their other products and customer service. See our picks below.
» How does your bank stack up? Compare what banks charge for overdrafts
A note about methodology: The financial institutions on this list all received a 5-star rating on their overdraft services based on NerdWallet’s star-rating process. Learn more about star ratings on our methodology page.
Overdraft fees are the fees that financial institutions charge consumers who make a transaction that costs more than the available funds in their account. The fees can be $30 or more per occurrence, and some institutions charge that fee multiple times per day if a customer continues to make transactions that overdraft their account. If a customer isn’t vigilant about watching their account balance, they could face more than $100 in fees without realizing they’ve overdrafted.
» Learn more about overdrafts with our guide to overdraft programs and fees
Some institutions have worked to create better overdraft services for customers by reducing or eliminating overdraft fees or by offering free or low-cost overdraft protection. The institutions on this list have created consumer-friendly overdraft policies and have strong overall star ratings for their other products and customer service. See our picks below.
» How does your bank stack up? Compare what banks charge for overdrafts
A note about methodology: The financial institutions on this list all received a 5-star rating on their overdraft services based on NerdWallet’s star-rating process. Learn more about star ratings on our methodology page.
Discover the bank accounts that fit your financial goals
Just answer a few questions to compare bank accounts that meet your needs.
Bank/institution | NerdWallet rating | APY | Bonus | Monthly fee | Overdraft star rating | Learn more |
---|---|---|---|---|---|---|
SoFi Checking and Savings Learn more at SoFi Bank, N.A., Member FDIC | Best for Overdrafts | 0.50% With $0 min. balance for APY | $300 Earn up to $300 with direct deposit. Terms apply. | $0 | 5.0/5 | Learn more at SoFi Bank, N.A., Member FDIC |
Ally Bank Spending Account | Best for Overdrafts | 0.10% With $0 min. balance for APY | N/A | $0 | 5.0/5 | Read review |
Chime Checking Account Learn more at Chime®, Deposits are FDIC Insured | Best for Overdrafts | N/A | N/A | $0 | 5.0/5 | Learn more at Chime®, Deposits are FDIC Insured |
Self-Help Credit Union Personal Checking | Best for Overdrafts | 0.10% With $0 min. balance for APY | N/A | $5.00 Waived with direct deposit or $2,500 minimum balance | 5.0/5 | Read review |
Alliant Credit Union High-Rate Checking | Best for Overdrafts | 0.25% With $0 min. balance for APY | N/A | $0 | 5.0/5 | Read review |
Navy Federal Credit Union Free EveryDay Checking | 0.01% With $0 min. balance for APY | N/A | $0 | 5.0/5 | Read review |
Our pick for
Overdrafts
APY
0.50%
Bonus
$300
Monthly fee
$0
Overdraft star rating
5.0/5
Why We Like It
SoFi charges no overdraft fees, and customers can also opt into two different options to cover their accounts in case of an overdraft. The first option is free overdraft protection, which automatically transfers money from a customer's savings balance to cover the transaction. The second option is no-fee overdraft coverage, where SoFi will cover a debit card transaction that would result in an overdraft of up to $50, as long as a customer qualifies by making $1,000 or more in direct deposits per month.
APY
0.10%
Bonus
N/A
Monthly fee
$0
Overdraft star rating
5.0/5
Why We Like It
Ally has no overdraft fees for any of its accounts, and there are two options for overdraft protection. The first option is to set up free overdraft protection transfers from a linked Ally savings account or money market account. The transfer will be rounded to the nearest $100 and sent to the customer’s checking account. The second option is Ally’s CoverDraft service, which provides up to $250 in coverage in case a customer overdrafts. A customer can qualify for CoverDraft 30 days after making a $100 deposit into their checking account, which means they receive basic overdraft coverage up to $100. If a customer deposits at least $250 for two months in a row, they qualify for up to $250 in coverage. If a customer overspends, their next deposit will apply to their negative balance, and they have 14 days to bring their account back to a positive balance.
APY
N/A
Monthly fee
$0
Overdraft star rating
5.0/5
Why We Like It
Chime charges no overdraft fees, and customers have access to Chime’s SpotMe® program for no-fee overdraft. Customers can qualify by making a monthly direct deposit of $200 or more and activating their Chime Visa debit card, and they are initially given a $20 overdraft limit that can eventually be increased to $200.
Chime says: "Chime SpotMe is an optional service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member's Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime's discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won't cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions."
APY
0.10%
Bonus
N/A
Monthly fee
$5.00
Overdraft star rating
5.0/5
Why We Like It
Self-Help Credit Union charges no overdraft fees and offers two ways to cover an overdraft: a free overdraft protection transfer service from a linked account and an overdraft line of credit.
There are a few things to consider with Self-Help Credit Union. To become a member, you can join for free if you live, work, worship or attend school in the credit union’s eligible counties based in Florida, North Carolina, South Carolina and Virginia. If you aren’t eligible that way, then you can pay a one-time $5 fee to join.
Note that there is also a $5 monthly service fee for Self-Help Credit Union’s checking account, which is waived if you are under 24 years old, over 65 years old, make $500 or more in direct deposits per month, or maintain a daily combined balance of $2,500 or more in your Self-Help Credit Union accounts.
APY
0.25%
Bonus
N/A
Monthly fee
$0
Overdraft star rating
5.0/5
Why We Like It
Alliant Credit Union doesn’t charge overdraft fees, and it offers two free services that customers can enroll in to cover overdrafts. The first service is overdraft protection, where customers can transfer funds from their linked Alliant savings account to cover an overdraft. With the second service, courtesy pay, Alliant will cover checks, electronic payments and transfers that extend beyond the amount that your overdraft protection would cover. To qualify for courtesy pay, customers must be Alliant Credit Union members for six months and transfer $600 per month into their checking account. The overdraft amount must also be paid back immediately.
APY
0.01%
Bonus
N/A
Monthly fee
$0
Overdraft star rating
5.0/5
Why We Like It
Navy Federal Credit Union has a relatively low overdraft fee of $20 per occurrence with a maximum charge of one overdraft fee per day. Customers can opt out of overdrafts — meaning a transaction will be declined if it would result in an overdraft — or customers can use two different overdraft coverage options. The first option is a free overdraft protection transfer from their savings account, and the second is a checking line of credit, which charges an interest rate from 13.9% to 17.9% APR.
Last updated on December 21, 2023
Methodology
We took a close look at over 90 financial institutions and financial service providers, including the largest U.S. banks based on assets, internet search traffic and other factors; 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.
Financial institutions and providers surveyed are: Affirm, Alaska USA Federal Credit Union, All America Bank, Alliant Credit Union, Ally Bank, Amalgamated Bank, America First Credit Union, American Express National Bank, Andrews Federal Credit Union, Associated Bank, Axos Bank, Bank of America, Bank5 Connect, Bank7, Barclays, Bask Bank, Bethpage Federal Credit Union, BMO, BMO Alto, Boeing Employees Credit Union, Bread Savings, Capital One, Carver Federal Savings Bank, Charles Schwab Bank, Chase, Chime, CIBC U.S., CIT Bank, Citibank, Citizens, Citizens Bank, City First Bank, Climate First Bank, Commerce Bank, Community First Credit Union of Florida, ConnectOne Bank, Connexus Credit Union, Consumers Credit Union, Current, Delta Community Credit Union, Discover Bank, E*TRADE, EverBank (formerly TIAA Bank), Fifth Third Bank, First Foundation, First National Bank, First Tech Federal Credit Union, Flagstar Bank, FNBO Direct, GO2bank, Golden 1 Credit Union, Greenwood, Hope Credit Union, Huntington Bank, Industrial Bank, Ivy Bank, KeyBank, Lake Michigan Credit Union, LendingClub Bank, Liberty Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Nationwide (by Axos), Navy Federal Credit Union, NBKC, One, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, Quontic Bank, Regions Bank, Revolut, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Securityplus Federal Credit Union, Self-Help Credit Union, Service Credit Union, SoFi, State Employees’ Credit Union of North Carolina, Suncoast Credit Union, Synchrony Bank, TAB Bank, TD Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, Upgrade, USAA Bank, Varo, Vio Bank, Wells Fargo and Zynlo Bank.
To recap our selections...
NerdWallet's Best Banks for Overdrafts 2024
- SoFi Checking and Savings: Best for Overdrafts
- Ally Bank Spending Account: Best for Overdrafts
- Chime Checking Account: Best for Overdrafts
- Self-Help Credit Union Personal Checking: Best for Overdrafts
- Alliant Credit Union High-Rate Checking: Best for Overdrafts
- Navy Federal Credit Union Free EveryDay Checking
As an expert in the field of personal finance and banking, I have a comprehensive understanding of the intricacies involved in financial institutions, especially regarding overdraft fees and protection options. My expertise is based on extensive research, firsthand experience, and an in-depth knowledge of the industry. Allow me to break down the concepts used in the provided article:
-
Overdraft Fees:
- Overdraft fees are charges imposed by financial institutions when an account holder makes a transaction that exceeds the available funds in their account.
- These fees can be substantial, often exceeding $30 per occurrence, and some institutions may apply the fee multiple times per day for ongoing overdraft transactions.
-
Consumer-Friendly Overdraft Policies:
- Some financial institutions aim to provide better services by either reducing or entirely eliminating overdraft fees.
- They may offer free or low-cost overdraft protection to prevent customers from incurring high fees.
-
NerdWallet's Star Rating Process:
- NerdWallet employs a star-rating process to evaluate financial institutions' overdraft services.
- The article mentions that all the listed institutions received a 5-star rating based on NerdWallet’s methodology, indicating high-quality overdraft services.
-
Listed Financial Institutions and their Features:
-
SoFi Checking and Savings:
- Offers no overdraft fees.
- Provides free overdraft protection and an option for no-fee overdraft coverage up to $50 for qualifying customers.
-
Ally Bank Spending Account:
- Features no overdraft fees.
- Offers overdraft protection through free transfers from linked savings accounts or via Ally’s CoverDraft service, providing up to $250 in coverage.
-
Chime Checking Account:
- Charges no overdraft fees.
- Features the SpotMe® program for no-fee overdrafts, initially offering a $20 overdraft limit that can be increased based on account history and qualifying factors.
-
Self-Help Credit Union Personal Checking:
- Imposes no overdraft fees.
- Offers overdraft protection through a free transfer service and an overdraft line of credit.
-
Alliant Credit Union High-Rate Checking:
- Does not charge overdraft fees.
- Provides overdraft protection through fund transfers from linked savings accounts and courtesy pay for certain transactions.
-
Navy Federal Credit Union Free EveryDay Checking:
- Has a low overdraft fee of $20 per occurrence.
- Offers options to opt out of overdrafts or choose overdraft protection through free transfers or a checking line of credit.
-
-
Methodology for Evaluating Financial Institutions:
- NerdWallet's methodology involves assessing over 90 financial institutions based on criteria such as annual percentage yields, minimum balances, fees, digital experience, and more.
- The evaluation includes a range of institutions, including banks and credit unions, considering factors like assets, internet search traffic, and membership.
-
Conclusion and Recommendations:
- The article concludes by presenting NerdWallet's picks for the "Best Banks for Overdrafts 2024," featuring institutions with 5-star ratings for their overdraft services.
- Recommendations include SoFi Checking and Savings, Ally Bank Spending Account, Chime Checking Account, Self-Help Credit Union Personal Checking, Alliant Credit Union High-Rate Checking, and Navy Federal Credit Union Free EveryDay Checking.