Overdraft Fees: Which Banks Have Lower Terms?

You’re going about your day as usual.

You hit the gym, work at a coffee shop with your Spotify playlist going, come home to unwind with some Netflix, or maybe lounge on the couch flipping through the latest New Yorker magazine. Later, you hop in the shower and prep dinner with your meal kit subscription.

All these are part of your normal routine, so you’re not really thinking about your bank balance. In your mind, everything is covered.

Then, out of the blue, you get a notification from your bank that your account was hit with an overdraft fee. ⚠️

Confused, you check your transactions and realize a payment went through, but your balance wasn’t enough to cover it.

The bank processed it anyway and added a fee for the trouble.

You might be left wondering, “What is an overdraft fee, and how did I end up with one?” 😟

In this article, we’ll explain to you:

• What an overdraft fee is
• How much it costs across different banks like Chase, Huntington Bank, and Wells Fargo
• How to avoid an overdraft fee
• How to get a refund for an overdraft fee

We’ll also share with you a great tool you can use to manage your bills more effectively and avoid these fees altogether.

What is an Overdraft Fee?

An overdraft fee (or overdraft transfer fee) is issued by the bank when you attempt to complete a transaction, but don’t have enough funds in your account to cover it. 

When this happens, the bank might allow the transaction to go through, putting your account into the negative and hitting you with an overdraft fee.

Common transactions that can trigger these fees are:

• Checks or other transactions where you used your checking account number
• Automated Clearing House (ACH) transactions
• Withdrawals
• Automatic bill payments (e.g., utility bills, phone bills, credit card payments)
• Recurring debit transactions (e.g., gym memberships, magazine subscriptions, streaming services)

Banks aren’t required to cover transactions that overdraft your account, no matter the type of transaction or whether you have overdraft protection. Ultimately, it’s up to the bank to decide.

If you overdraft your account, the following scenarios typically occur:

Overdraft fee

If you haven’t signed up for overdraft protection, the bank might still let you spend more than what’s in your account for things like checks, automatic bill payments, or non-ATM debit transactions. This will result in an overdraft fee, though the types of transactions that cause it can vary depending on your bank.

Returned item fee / non-sufficient funds (NSF) fee

If there’s not enough money in your account for a purchase and the bank doesn’t cover it, they’ll either decline the transaction or return it unpaid, hitting you with a non-sufficient funds (NSF) fee.

Overdraft protection transfer fee

If you’ve opted into overdraft protection, the bank will cover your transaction, even if you don’t have enough money in your account. However, they’ll transfer the necessary funds from another linked account and charge you a transfer fee for that service.

How Much Does an Overdraft Fee Cost?

Overdraft fees differ from bank to bank. To make it easier for you, we’ve put together a table showing the overdraft fees for several well-known banks across the U.S.

As you can see, BECU and Citibank offer the lowest overdraft fee at $0, followed by Bank of America with just $10.

Find more details on each bank’s overdraft policies and guidelines below:

Bank of America (BoA)

Here are the transactions that can lead to an overdraft fee from Bank of America:

• Checks
• Other transactions made with your checking account number
• Recurring debit card transactions
• ACH transactions
• Online or automatic bill payments

⚠️ BoA limits the number of overdraft fees to no more than two per day.

If you want BoA to cover overdrafts every day, non-recurring debit card transactions (like gas or groceries), and ATM withdrawals, you must first opt into its overdraft protection service, Balance Connect.

To set it up, you’ll link a qualified account, which allows the bank to transfer money from one account to another if you overdraft. Some examples of qualified accounts are:

• Savings or secondary checking account
• Line of credit
• Credit card

Find Bank of America’s full fee schedule here.

Boeing Employees Credit Union (BECU)

When you open a consumer account at Boeing Employees Credit Union (BECU), you are automatically enrolled in an overdraft service that enables the credit union to cover certain transactions if you don’t have enough money in your account at the time.

These transactions include:

• Checks
• ACH transactions
• Person-to-person transactions (e.g. Zelle, Venmo)

If you’d rather not have BECU cover these types of transactions, you’ll need to opt out of the service.

For other purchases, like those made with your debit card, BECU will only charge you an overdraft fee if you’ve chosen to opt into their optional courtesy pay service.

⚠️ BECU only charges a maximum of five overdraft fees on a single day.

The credit union lets you connect your checking account to other BECU accounts to cover any transactions that would otherwise overdraw your account. These include:

• Savings accounts
• Money market accounts
• Lines of credit

However, you may still be charged an overdraft protection fee for these transfers.

Here are a few other BECU resources that you might find helpful:

• BECU Consumer Account Disclosure
• BECU Account Agreements

Chase 

Overdraft fees at Chase can be triggered by:

• Checks
• Automatic payments
• Recurring debit card purchases

⚠️ Chase sets the maximum number of overdraft fees to no more than three per day.

For Chase to cover everyday debit card transactions (like groceries, gas, and dining out), you must first opt into overdraft protection.

You can activate this by connecting a qualified account from which Chase can transfer funds to cover an overdraft. Qualified accounts include:

• Chase checking accounts and savings accounts
• Chase lines of credit
• Chase credit cards

Find Chase’s full fee schedule here.

Citibank 

Citibank has pledged to eliminate overdraft fees. Instead, it offers overdraft protection services that can cover negative balance transactions, including:

• Safety Check: If you overdraft, Citibank will pull available funds from your linked Citibank savings account to cover the amount, plus any fees.
• Checking Plus: This option taps into your credit line and moves money into your checking account to cover the overdraft and other related fees automatically.

Find Citibank’s full Client Manual for consumer accounts here.

Citizens Bank 

Transactions that can trigger an overdraft fee in Citizens Bank include the following:

• Checks
• Other transactions made with your checking account number
• Recurring debit card transactions
• ACH transactions
• Online or automatic bill payments

⚠️  Citizens Bank caps the number of overdraft fees to five per day.

For Citizens Bank to cover other overdrafts for everyday, non-recurring debit card transactions (e.g., gas, groceries) and ATM transactions, you must first opt into the Debit Card Overdraft Coverage.

Set this up by linking a qualified account. This lets the bank transfer funds from one account to the other in the event of an overdraft. Qualified accounts at Citizens Bank include:

• Savings account
• Line of credit

Fifth Third Bank 

Fifth Third Bank may charge you an overdraft fee for things like:

• Checks
• Other transactions made with your checking account number
• ACH transactions
• Online or automatic bill payments
• Recurring debit card transactions

⚠️  Fifth Third limits overdraft and returned item fees to a maximum of three per day.

If you want the bank to cover overdrafts on ATM transactions and everyday, non-recurring debit purchases (like gas or groceries), you must first opt into overdraft protection and link a qualified account. Otherwise, the bank will simply decline the transaction and not issue you a fee.

To activate overdraft protection, link a qualified account so funds can be transferred to cover any overdrafts. These accounts could be:

• Savings or secondary checking account
• Line of credit
• Credit card

For more details on Fifth Third Bank’s overdraft coverage, check out their specific guidelines here.

Huntington Bank 

The transactions that can lead to an overdraft fee at Huntington Bank are:

• Checks
• Other transactions made with your checking account number
• Automatic bill payments

If you’d prefer the bank to decline these transactions when you don’t have enough funds instead of covering them and charging you a fee, you’ll need to ask Huntington Bank to stop paying for them automatically.

The bank can also cover other types of overdraft transactions, like everyday, non-recurring debit card transactions (e.g., gas, groceries) and ATM withdrawals, but you have to ask them first.

⚠️  Huntington Bank only allows a maximum of three overdraft fees per day.

You can cover overdraft fees and returned item fees by having money automatically transferred from a linked:

• Savings account
• Money market account
• Personal credit line
• Voice Credit Card

Find Huntington Bank’s overdraft fee guide here.

M&T Bank 

At M&T Bank, certain transactions can trigger an overdraft fee, such as:

• Checks
• Other transactions made with your checking account number
• Automatic bill payments

⚠️  M&T Bank only allows one overdraft or insufficient funds fee per day. If you have a MyWay Banking account, you won’t be charged any overdraft fees at all.

For M&T Bank to cover other overdrafts for everyday, non-recurring debit card transactions (e.g., gas, groceries) and ATM withdrawals, you must first opt into overdraft protection.

To set this up, you’ll need to link a qualified account from which the bank can pull funds to cover the overdraft. You can link:

• Savings account
• Line of credit
• Credit card

For all details, check out M&T Bank’s full fee schedule here.

Navy Federal Credit Union 

The Navy Federal Credit Union (NFCU) offers three types of Overdraft Coverage to help you manage your account when funds are low:

1. Overdraft Savings Transfer: NFCU automatically transfers funds from a connected savings account. This type of transfer does not charge a fee.
2. Checking Line of Credit (CLOC): NFCU applies your overdraft transaction to a linked line of credit, which requires credit approval. In this situation, NFCU can issue you an overdraft fee, but it may cost less than an OOPS fee.
3. Optional Overdraft Protection Service (OOPS): An opt-in service that allows NFCU to cover various transaction types when you do not have enough funds in your account to cover a purchase. If you opt into OOPS and overdraw your account, NFCU may charge you an overdraft protection fee. However, you have up to 30 days to bring your balance back into the positive before you get charged.

To sign up for any of these options, just call 1-888-842-6328.

If you choose to opt into OOPS, you can select which transactions you want covered, including:

• Checks, ACH transactions, automatic bill payments, and other transactions using your checking account number
• ATM withdrawals and debit purchases
• All of the above

To qualify for OOPS, you need to:

• Be at least 18 years old
• Have been an NFCU member for at least 90 days
• Have no delinquencies or legal holds on your NFCU accounts

Even if you don’t opt into OOPS, NFCU can still charge an overdraft fee if they authorize a transaction or place a hold for an amount smaller than the actual purchase.

Before you decide to opt in, think about whether OOPS is right for you. A good way to reduce potential overdraft fees is by opting into OOPS only for checks, ACH transfers, automatic bill payments, and transactions using your account number—while skipping ATM and debit purchase coverage.

PNC Bank 

The transactions that can cause you an overdraft fee at PNC Bank include:

• Checks
• ACH transactions made with your PNC checking account number
• Automatic bill payments

⚠️  PNC Bank caps the number of overdraft fees to a maximum of only one per day.

For PNC to cover overdrafts on ATM transactions and debit transactions, you must first opt into one of the bank’s overdraft protection services.

To enable overdraft coverage, you must link a qualified account so that the bank can transfer funds from your linked account to your primary checking account in the event of an overdraft. A qualified linked account could include:

• PNC savings account
• Secondary PNC checking account
• Money market account
• Personal or home equity line of credit
• PNC credit card

Find the full PNC Financial Services Group, Inc., fee schedule here.

Regions 

At Regions, certain transactions can lead to overdraft fees, like:

• Checks
• ACH payments
• In-person or ATM withdrawals
• Debit card purchases
• Any other manual or electronic withdrawals

⚠️ Regions limit the number of overdraft fees to no more than three per day.

For Regions to cover overdrafts on ATM transactions and everyday checking account purchases, you’ll need to opt into overdraft protection. To do this, you must link a qualified account, which allows the bank to transfer funds to cover any overdrafts. Qualified accounts include:

• Regions checking accounts
• Eligible savings accounts
• Money market accounts
• Lines of credit
• Credit cards

This helps you avoid unexpected overdraft fees by pulling from another account when your balance is low.

Find Region’s full fee schedule here.

State Employees Federal Credit Union (SEFCU)

At State Employees Federal Credit Union (SEFCU), certain transactions can lead to an overdraft fee. These include:

• Checks
• Other transactions that used your checking account number
• Automatic bill payments

⚠️  SEFCU doesn’t cap the number of overdraft fees you can receive in a single day, so multiple fees are possible.

If you want SEFCU to cover other transactions, such as ATM withdrawals or one-time debit purchases, you’ll need to opt into their premium overdraft service and link a qualifying account.

Find SEFCU’s overdraft specifications here.

U.S. Bank 

You can trigger an overdraft fee at U.S. Bank for things like:

• Checks or other transactions made using your checking account number
• Automatic/recurring bill payments
• Recurring debit charges

⚠️ U.S. Bank limits overdraft fees to only three per day.

If you’d like for the U.S. Bank to cover overdrafts on ATM transactions and everyday, non-recurring debit purchases (e.g., gas, groceries), you must opt into overdraft protection.

To do this, link a qualified account from which funds will be transferred in case of an overdraft. Qualified accounts include:

• U.S. Bank savings or money market
• U.S. Bank credit card
• U.S. Bank Reserve line of credit
• U.S. Bank Premier line of credit
• U.S. Bank Home Equity line of credit

Wells Fargo 

At Wells Fargo, overdraft fees apply automatically for most transactions like:

• Checks or payments made using your checking account number
• Recurring debit card charges
• ACH transactions
• Online or automatic bill payments

⚠️ Wells Fargo caps the number of overdraft fees to three per day. However, if you have a Wells Fargo business account, the daily limit is four. For Teen Checking accounts, it’s limited to two.

If you want Wells Fargo to cover ATM and everyday debit purchases (like gas or groceries) when your account balance is too low, you’ll need to opt into their Debit Card Overdraft Service.

Chase’s Debit Card Overdraft Service is not available for certain accounts:

• Wells Fargo Clear Access BankingSM accounts
• Teen CheckingSM accounts
• Opportunity Checking® accounts
• IOLTA/RETA accounts
• Accounts for government entities
• Savings accounts

Find Wells Fargo’s full fee schedule here.

How to Avoid an Overdraft Fee

Overdraft fees can be a frustrating surprise, and they are one of the most common charges detected on Cushion’s customers’ accounts. But there are some simple steps you can take to prevent them:

• Keep an eye on your account balance and charges.
• Transfer money into your low-balance account.
• Set up low-balance alerts and notifications.
• Think carefully about opting into overdraft protection.

Overdraft fees can be a financial headache, and they add up fast. For some extra security, you can opt into overdraft protection, which ensures your transactions go through even if your balance is too low—but you’ll still get hit with a fee.

Overdraft Protection: What It is, and When to Opt In or Out

When you opt into overdraft protection, your bank will cover transactions when your account dips below $0. In return, you’ll pay a fee for the service.

Here’s what to keep in mind if you’re considering overdraft protection:

• There are different types of overdraft protection.
  • Standard/courtesy overdraft: This covers ATM withdrawals and debit purchases, but a fee is charged for each transaction.
  • Linked account: You can link another checking or savings account, and the bank will transfer funds to cover an overdraft. There’s a fee per transfer, but it’s usually lower than a standard overdraft fee (around $10–$12.50).
  • Linked credit card: The overdraft is covered by a linked credit card, which involves a fee plus interest.
  • Overdraft line of credit: This acts as a loan to cover the overdraft, with both a fee and interest.
• Some banks won’t charge an overdraft fee if your account is overdrawn by a small amount—typically under $5.
• If you opt into overdraft protection, expect to pay more in fees. A study by the Consumer Financial Protection Bureau shows that accounts with overdraft protection pay an average of $21.61 per month in fees compared to just $2.98 for those without it.
• Even if you don’t opt in, you’re not totally safe from overdraft fees. Banks can still charge you for overdrafts on things like checks or automatic payments.
• Your bank might charge you an NSF fee instead if you choose not to opt in.
• If your account stays overdrawn for too long, the bank could close it. This makes it harder to open accounts in the future. Banks look at factors like the size of the overdraft, how long your account has been negative, and your overall banking history when deciding whether to close your account.

So, should you opt in or not? 

Like most things related to finances, it depends entirely on your situation.

You might want to opt in if:

• You want the security of knowing you can make purchases or withdraw cash even when your account is low, especially in emergencies (like paying for a car repair or urgent medical bill).
• You occasionally fall short on money for essential bills. For instance, if you can’t cover a $72 gas bill this month, a $35 overdraft fee might be worth it to keep your service from being disconnected. Just make sure to replenish your account quickly to avoid more fees.

You might want to opt out if:

• You don’t have many essential bills to cover.
• You’re trying to control your spending more carefully.
• You use mobile banking or get balance alerts and can transfer funds before your account dips into the red. This can help you avoid overdrafts altogether.

In the end, overdraft protection is all about personal preference and your financial habits. Weigh the pros and cons based on your situation, and remember, you can always change your decision if your needs shift.

Another great tool you can use to stay on top of your finances is Cushion. This app makes tracking your bills easier by connecting directly to your bank account, organizing all your payments, and sending reminders when they’re due. With Cushion, you can avoid surprise overdrafts and even build your credit by consistently managing your bills​.

How to Get an Overdraft Fee Refund

Even if all precautionary steps have been taken, overdraft fees still happen. Fortunately, there are ways to reverse the penalties. Here are some steps that you can take to optimize your chances of getting a refund when you begin the negotiation process with your financial institution.

1. Have all your information ready.

This includes your name, address, bank account number, and the fees that you’d like to negotiate.

2. Introduce yourself.

When you’re ready, call and politely introduce yourself. You can say something like, “Hello. My name is , and I recently received an overdraft fee while using my card. I’m contacting you to see if you would be willing to refund this fee.”

3. Prepare your points of leverage.

Then, make your case using your points of leverage. Do you rarely get hit with overdraft fees? Have you been a loyal Regions customer for a long time? Do you have multiple accounts or make regular deposits? These are all good reasons to mention.

4. Be polite, patient, and prepared for a possible “no.”

The representative you’re speaking with didn’t create the refund policies, so a little kindness can go a long way. If they can’t help, don’t give up—that’s where your points of leverage come in.

Sometimes, success depends on who you talk to. If you don’t get a refund right away, consider calling again a few days later to speak with a different rep or ask to speak with a supervisor.

Unfortunately, not every negotiation will work out. If that happens, don’t get discouraged—just take steps to avoid overdraft fees in the future.

Frequently Asked Questions (FAQs)

What is an overdraft advance transfer?

An overdraft advance transfer is when your bank automatically moves funds from a linked account to cover a payment that exceeds your checking balance. This helps you avoid an overdraft fee, but some banks might still charge a transfer fee.

What is the overdraft fee for a transaction?

An overdraft fee is the amount your bank charges when a transaction puts your account below zero, and they still cover it. The fee usually ranges from $30 to $35, depending on your bank’s policies.

Can I transfer money from my overdraft to another account?

No, you can’t transfer money from an overdraft to another account. An overdraft is essentially a negative balance, so you’ll need to deposit funds into your account to cover it.

What are the banks with no overdraft fees?

Some checking accounts with no overdraft fees include:

• Capital One 360 Checking® Account
• Ally Bank Spending Account
• Discover® Cashback Debit Account
• Axos Bank Rewards Checking
• Betterment Checking
• Wealthfront Cash Account
• Alliant Credit Union High-Rate Checking

Summary

Overdraft fees are simply a result of spending money that you don’t have.

If you think you’re prone to this, consider banking with BECU and Citibank, as they don’t charge overdraft fees.

In case you do get charged overdraft fees, you can request a refund by calling your bank.

Still, it’s always better to work on managing your finances, building healthier money habits, and avoiding overspending.

Don’t forget to explore Cushion to stay on top of your bills and prevent overdraft fees in the future!