Best checking accounts for $0 overdraft fees

With these checking accounts, you won’t get penalized for overdrafts

Overdraft (also known as non-sufficient funds or NSF) fees are tough on you but great for banks. These fees can hit you with unexpected charges that can often spiral out of control and can hit you when you’re most vulnerable. Fortunately, we’ve pulled together some of the best checking accounts for $0 overdraft fees — and/or offer 2 day early pay so you don’t have to worry about cutting a purchase too close. 

Check out the table below to learn more about some of these accounts, and read on to discover the lasting damages caused by overdraft fees.

Banking product
	Pros: ✓ No minimum to open ✓ No minimum balance ✓ No monthly fees ✓ No overdraft fees ✓ Great mobile app + notifications   ✓ Get paid 2 days early ✓ Automatic savings ✓ No fee for replacement debit card Cons: • No cash deposits, no checkbooks, and no physical locations	Learn more
	Pros: ✓ No minimum to open ✓ No minimum balance ✓ No monthly fees ✓ No overdraft fees ✓ Mobile app, mobile check deposits, bill pay, push notifications available ✓ Get paid 2 days early ✓ Automatic savings Cons: • Doesn’t earn interest, no physical locations, $25 fee for replacement debit card	Learn more
	Pros: ✓ No minimum balance ✓ No monthly fees ✓ No overdraft fees ✓ Mobile app, mobile check deposits, bill pay ✓ Get paid 2 days early ✓ Unlimited cash bank on Radius debit card  Cons: • $100 minimum opening deposit, extended overdraft penalty of $5 per day, app notifications not available, only one physical location, $35 fee for replacement debit card	Learn more
	Pros: ✓ No minimum balance ✓ Overdraft protection up to $200 ✓ Mobile app, mobile check deposits, bill pay ✓ Get paid 2 days early ✓ 2% cashback on qualifying online and mobile purchase Cons:  • $7.95 per month fee unless you spend $1000/mo on the card. $5.95 paper check fee, no physical locations.	Learn more
	Pros: ✓ No minimum balance ✓ No overdraft fees/safe balance ✓ Mobile app, mobile check deposits, bill pay ✓ Branches nationwide Cons:  • $100 minimum opening $12 per month unless have qualifying direct deposit of $250, maintain a $1500 minimum daily balance, or are enrolled in their Preferred Rewards program, $5.00 replacement debit card	Learn more
	Pros: ✓ No minimum to open ✓ No minimum balance ✓ No monthly fees ✓ No overdraft fees ✓ Great mobile app + notifications, deposits  No fee for replacement debit card ✓ Reimbursed ATMs worldwide ✓ Peer-to-peer payments Cons:  • No checkbook, no branches, only interest-bearing with a cash reserve account	Learn more

What’s an overdraft fee?

Say you have about $100. You’re not entirely sure because, well, you’ve been busy with work and friends and you haven’t been paying attention to your exact balance.

But, c’mon, you don’t need to know it to the penny, do you? Well, you might. Let’s say, for example, you saw an online ad for a pair of headphones you really, really want. 

They’re $100, and you figure you’ve got about that much in your account, so you hit the Buy Now button and imagine how your favorite tunes are going to sound on your new purchase. 

• You’re pretty happy… until you get a notification that you’ve over-drawn your checking account. The purchase went through, but the bank charged you a fee for trying to spend more money than you actually had. 

• You had $97 and spent $100, so your balance dropped to $-3… except you got hit with the overdraft fee of $35, now you have $-38 in your account.

• This is bad. The bank has charged you for the privilege of using its money and will collect the first $35 of the next money that comes into your account. It’s annoying and frustrating to be sure, but it gets worse. Read on to see how overdraft fees can pile up.

How does the bank handle overdraft fees?

If you have overdraft protection, your bank will let your account become negative but will charge you fees for every transaction.

Of course, this varies from bank to bank, but for banks that don’t have $0 overdraft fees, these situations can be rough on account holders. Take the example above:

• You’re down to $-38 in your account. Maybe you know because you set up mobile alerts to tell you when your balance dipped below a certain amount. But maybe you don’t, because you haven’t been paying close enough attention to how much money you have to last you to payday.

• So you make another purchase, unaware that you have a negative balance (or maybe you do know, but you have to buy this one item now. It just can’t wait until payday). 

• So, rather than having your bank reject the transaction, the sale goes through. Your $20 purchase brings your account down to $-58, but another $35 overdraft fee brings you to $-93. 

• You’ve been hit with $70 worth of overdraft fees, and there’s no end in sight!

According to The Pew Charitable Trust, U.S. banks charged users over $2.4 billion in overdraft fees in the first half of 2015 alone.

Again, depending on the bank, you may get a notification when you have an overdraft. Sometimes it only happens when you sign up for that option.

Also, in the examples above, you were making purchases, but you can also be hit with these fees when you take money out of an ATM. You’ll get your cash but the machine won’t tell you about the overdraft fee — until you check your balance and realize it’s a lot lower than you expected.

What can you do to avoid bank overdraft fees?

There are several ways to avoid these fees.

• One way is to make sure you keep close track of how much money you have in your account and not spend more than you have! Banking apps can really help with this.

• Set up alerts to let you know if your balance drops low or if you’re in danger of overdrafting. 

• Reschedule payments, avoid making purchases or find some money to transfer into your account until you’re in better financial shape.

• Find an account that has no overdraft fees, or offers a solution:
  • Declining payments when they’d cause an overdraft
  • Transferring money from savings to cover the overdraft
  • Giving a small line of credit to cover the occasional overdraft

What’s the impact of bank overdraft fees?

The short answer is, they can really add up and cause a chain reaction that can be hugely detrimental.

According to the Consumer Financial Protection Bureau, 18% of customers make up 91% of overdraft fees in 2015. More than half of these people are under 30 years of age. You can see how these fees add up and can be crippling, especially for young people who may be making below-average salaries.

The fact of the matter is that the majority of overdraft fees came from transactions costing $24 or less, so people ended up paying more than twice as much for their purchases as they intended to!

What about bank fee overdraft protection?

One way to avoid overdraft fees is to find an account (or, more likely, a pair of accounts, as you’ll soon see) that offer overdraft protection. This automatically transfers money from your savings account when you don’t have enough money in your checking account to cover the purchase or withdrawal.

Some overdraft protection plans let you use a credit card to cover the difference, but using a savings account is smarter, as you won’t build up additional, perhaps unexpected, debt.

Overdraft protection is helpful, as it prevents you from being hit with the overdraft fee. In some cases, there are monthly or weekly limits to the number of times your overdraft protection can kick in.

In addition, you’ll, of course, need to be sure you have a savings account and make sure you have enough in that account to cover the overdraft (and still have the minimum balance required by your savings account, too).

Will banks waive overdraft fees?

In some cases, banks may waive overdraft fees. During the current COVID-19 crisis, for example, many banks announced that they’d waive the fees during the duration of the pandemic.

In other cases, you may be able to call your bank and ask them to remove overdraft fees due to specific circumstances or hardships. It doesn’t always work, but it doesn’t hurt to try. You might end up changing your type of account to one that doesn’t have overdraft fees, which will benefit you in the long run!

Find an account with a $0 overdraft fee

People don’t typically try to spend money they don’t have, but sometimes, it happens. We forget about bills that have come due or lose ourselves in details and we overdraft our checking account. In these cases, we don’t want to be hit with a $35 overdraft fee, especially on the purchase of that $6 latte!

If you think you may be likely to overdraft from time to time, it’s worth it to take a close look at some of the accounts above and find yourself the best checking account for $0 overdraft fees!