Checking And Savings Accounts With Overdrafts

Oct 11, 2023 By Triston Martin

Capital One made history on December 1 by being the first major bank to abolish all overdraft fees and non-sufficient money fees, possibly to avoid attention from the Consumer Financial Protection Bureau. Following that declaration, JPMorgan Chase stated that it would provide account customers with additional means to avoid incurring overdraft service costs.

In 2022, users will be able to access their direct deposit payroll funds two days early and have a full day following an overdraft to add to their balance. Although these two institutions have been in the spotlight recently, they are following the lead of numerous smaller banks that have eliminated overdraft fees to increase customer numbers.

Aiming to prevent its customers from falling farther behind financially as the epidemic progressed, online-only Ally Bank eliminated overdraft fees for all accounts in June of this year.

When you make a purchase using your bank account that is greater than the funds currently available, you will be charged an overdraft fee. When this happens, your account balance becomes negative, and you risk being charged an overdraft fee of $35 or more.

An instance of An Overdraft in a Bank Account

Here's a possible scenario to mull over. Suppose Mary used a check for $2,000 worth of cosmetics she bought at a store. Unfortunately, when the shopkeeper deposited the cheque, Mary's bank account only held $1,500.

Therefore she owes the business $500. There are two possible outcomes here: either the merchant's bank will cover the entire transaction, or Mary's bank will get a "bounced" check that is marked "NSF" (non-sufficient funds). In the first scenario, Mary must pay the $500 overdraft fee.

7 Checking Accounts Without Overdraft Fees

Capital One 360 Checking

At the beginning of 2022, Capital One 360 Checking will no longer assess any fees for insufficient funds or overdrafts. There are currently no account fees, minimum balances, or minimum deposits. For free, account holders can use any of the 70,000+ Capital One®, MoneyPass, or Allpoint® ATMs nationwide.

Ally's Interest Checking Account

There aren't any hidden costs associated with the Ally Interest Checking Account, such as monthly maintenance fees or minimum deposit amounts. Account holders who maintain a balance of less than $15,000 get 0.10% APY, while those with a balance of more than $15,000 earn 0.25% APY. There are over 43,000 Allpoint® ATMs available to you at no cost.

Discover Cashback Credit Card

To avoid fees, you may sign up for overdraft protection with the Discover Cashback Debit Account; if you go over your budget, Discover will automatically transfer funds from your savings account to your checking account.

Account users are not required to make a minimum deposit or have a minimum balance, and there are no monthly maintenance fees. You may get incentives for your purchases with this checking account: Get paid back up to $10.00 monthly in cash for using your debit card. Over 60,000 Allpoint® and MoneyPass® ATMs are part of Discover's free ATM network.

Axos Bank Reward Checking

Customers of the online bank Axos Bank won't have to worry about overdrafts or monthly fees while using the bank's Rewards Checking account. Account holders who satisfy certain criteria can earn a maximum APY of 1.25% through the tiered APY rates: You must have at least $1,500 deposited into your account each month via direct deposit and make at least 10 purchases using your debit card each month.

Before December 31, 2012, you may get $100 when you open a Rewards Checking account using the promo code RC100. Then make one or more eligible direct deposits to get a maximum bonus of $100.

Betterment Checking

There are no overdraft fees with the Betterment Checking account, which is available only online. If you use an ATM outside of Betterment's network, wherever you may be in the globe, Betterment will cover the price.

Account members will automatically earn cash-back benefits by purchasing at well-known retailers, including Dunkin' Donuts, Adidas, Walmart, Sam's Club, and Staples. Plus, if you pay your monthly cell phone bill using a Betterment debit card, you'll be automatically covered by insurance.

Cash Account in Wealthfront

Clients of Wealthfront Cash Account are not charged overdraft or maintenance fees. Access to a network of 19,000 surcharge-free ATMs and an APY of 2.55% are just two of the perks of opening an account with this bank. Transferring surplus funds from one account to another inside Wealthfront is a simple way to start investing immediately.

Alliant Credit Union Checking

No monthly service charge, or overdraft fees are associated with the Alliant Checking account. All balances in the checking account earn a higher-than-average 0.25% APY, and customers can access over 80,000 free ATMs around the country.

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