8 Best Banks for Overdrafts 2023
These financial institutions charge low or no overdraft fees and offer overdraft coverage options.
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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. However, the star ratings listed on this roundup reflect the financial institutions’ checking account star ratings, which include not only overdraft policies but also such factors as monthly fee, interest rates, minimum opening deposits and domestic ATMs. 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. However, the star ratings listed on this roundup reflect the financial institutions’ checking account star ratings, which include not only overdraft policies but also such factors as monthly fee, interest rates, minimum opening deposits and domestic ATMs. Learn more about star ratings on our methodology page.
Best Banks for Overdrafts 2023
Bank/institution | NerdWallet rating | Monthly fee | APY | Bonus | Learn more |
---|---|---|---|---|---|
![]() SoFi Checking and Savings Learn more at SoFi Bank, N.A., Member FDIC | Best for Overdrafts | $0 | 0.50% With $0 min. balance for APY | $250 Earn up to $250 with direct deposit. Terms apply. | Learn more at SoFi Bank, N.A., Member FDIC |
![]() Axos Bank® Rewards Checking Learn more at Axos Bank®, Member FDIC | Best for Overdrafts | $0 | 3.30% With $0 min. balance for APY | $300 Earn $300 with direct deposit. Terms apply. | Learn more at Axos Bank®, Member FDIC |
![]() Ally Bank Spending Account | Best for Overdrafts | $0 | 0.10% With $0 min. balance for APY | N/A | Read review |
![]() One Spend | Best for Overdrafts | $0 | N/A | N/A | Read review |
![]() Chime Checking Account Learn more at Chime, Deposits are FDIC Insured | Best for Overdrafts | $0 | N/A | N/A | Learn more at Chime, Deposits are FDIC Insured |
![]() Current Account Learn more at Current, Deposits are FDIC Insured | Best for Overdrafts | $0 | N/A | N/A | Learn more at Current, Deposits are FDIC Insured |
![]() Varo Bank Account Learn more at Varo Bank, Member FDIC | Best for Overdrafts | $0 | N/A | N/A | Learn more at Varo Bank, Member FDIC |
![]() Self-Help Credit Union Personal Checking | Best for Overdrafts | $5.00 Waived with direct deposit or $2,500 minimum balance | 0.10% With $0 min. balance for APY | N/A | Read review |
Our pick for
Overdrafts
$0
0.50%
$250
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.
$0
3.30%
$300
Why We Like It
Axos doesn’t charge any overdraft fees; though Axos might occasionally pay for overdrafts at its discretion, transactions are typically declined unless a customer is enrolled in one of Axos’ overdraft protection programs. There are two options: a free overdraft protection transfer from a linked money market or savings account, or an overdraft line of credit. The overdraft line of credit has an 18% APR, so it could be an expensive option. If a customer’s account is overdrawn from an automatic electronic transfer such as bill pay or a check, Axos may charge $25 per item, with a maximum of three charges per day. However, if the overdraft is less than $25, there is no fee.
$0
0.10%
N/A
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.
$0
N/A
N/A
Why We Like It
One doesn’t charge any overdraft fees or nonsufficient funds fees. If a customer deposits at least $500 into their One account in the previous 31 days, they have access to up to $200 in overdraft coverage linked to their Spend Pocket, which is One’s version of a checking subaccount. The negative balance is automatically repaid with the next deposit or transfer a customer makes into their Spend Pocket which should happen as soon as possible. Otherwise, One might close your account and/or report you to a consumer reporting agency.
$0
N/A
N/A
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.
However, one thing to consider before opening a Chime account is that NerdWallet issued a star rating penalty to Chime for outsized consumer complaints in 2021. The Consumer Financial Protection Bureau received a wave of complaints regarding Chime involuntarily closing customer accounts, an issue that was reported by ProPublica.
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."
$0
N/A
N/A
Why We Like It
Current doesn’t charge overdraft fees because overdrafts are not permitted. If you become eligible for Current’s Overdrive program — which happens when you direct deposit $500 or more per month — and opt into it, you are given a dollar limit that you can overdraft without a fee. The limit starts at $25 and goes up to $200. Overdrive doesn’t cover any nondebit purchases, such as ATM withdrawals, checks or electronic transfers.
$0
N/A
N/A
Why We Like It
Varo doesn’t charge overdraft fees and will decline transactions that would result in a negative balance. If your account dips below zero from a charge amount that was changed after a transaction, such as when a restaurant adds your tip to the charge total, Varo still doesn’t charge an overdraft fee. Varo also offers a cash advance program that can help with low account balances. Customers can borrow $20 with no fee as well as incrementally higher amounts up to $250 that come with a small fee. All amounts must be paid back within 30 days. To qualify for Varo Advance, customers must have an account that’s older than 30 days, must have activated their Varo debit card and must have received $1,000 or more in direct deposits in the past 31 days.
$5.00
0.10%
N/A
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 in direct deposits or more per month, or if you maintain a daily combined balance of $2,500 or more in your Self-Help Credit Union accounts.
Last updated on July 11, 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, Bank of the West, Bank5 Connect, Bank7, Barclays, Bask Bank, Bethpage Federal Credit Union, BMO, BMO Alto, Boeing Employees Credit Union, Bread Savings, BrioDirect, Capital One, 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, Fifth Third Bank, First Foundation, First National Bank, First Republic 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, PurePoint Financial, Quontic Bank, Regions Bank, Revolut, Salem Five Direct, Sallie Mae Bank, Santander Bank, Scarlet, SchoolsFirst Federal Credit Union, Securityplus Federal Credit Union, Security Service 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, TIAA 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 2023
- SoFi Checking and Savings: Best for Overdrafts
- Axos Bank® Rewards Checking: Best for Overdrafts
- Ally Bank Spending Account: Best for Overdrafts
- One Spend: Best for Overdrafts
- Chime Checking Account: Best for Overdrafts
- Current Account: Best for Overdrafts
- Varo Bank Account: Best for Overdrafts
- Self-Help Credit Union Personal Checking: Best for Overdrafts