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In this side-by-side comparison, we review the 10 Best Checking Accounts with No Overdraft Fees (for 2021). By the end of this article, you will know exactly which checking accounts will not charge you for overdraft fees. So, what are we waiting for? Let’s dive in!
What Is an Overdraft Fee?
Understanding an overdraft fee is straightforward. An overdraft fee is when the bank covers the cost of a specific transaction because your checking account has a low balance and cannot afford to make the purchase.
How Does A Bank Overdraft Work?
All financial institutions handle overdraft fees differently, but for the most part, they charge their customers a flat fee for each overdraft violation. Some banks are more forgiving – like the ones we review below – while others are not.
Specific banks offer free overdraft protection services, or a line of credit with an associated interest rate, while others allow you to link a saving or brokerage account, and will automatically transfer funds once your checking account is deemed to have insufficient funds.
The ones that charge you for each overdraft transaction are the banks you need to avoid if you want to save money.
Looking Ahead: Top Checking Accounts with No Overdraft Fees
Unfortunately, millions of Americans are strapped for cash. To make matters worse, most banks charge their loyal customers with an overdraft fee if their checking account dips below $0 is showing a negative balance.
However, there are still some financial institutions that recognize most Americans are not financially independent. Fortunately – for you – these banks offer straight forward checking accounts with no overdraft fees. Alas, gone are the days where you worry about a negative balance or paying a hefty fee.
Backed by hours of research, expert testimony, and renowned customer service, we cut through the noise and narrowed down the best checking accounts for avoiding overdraft fees.
Is There A Bank with No Overdraft Fees?
- Capital One
- Charles Schwab
These financial institutions make it a top priority to limit their fees – and believe me, they do just that with their checking accounts.
Top 9 Best Checking Accounts with No Overdraft Fees
As a clear industry leader, Chime is the best checking account with no overdraft fees˜. For those that do not know, Chime is a hot new FinTech Firm that has attracted a legion of fans due to its zero-fee˜ checking account.
As your future financial app, Chime rolled out a brand new SpotMe® feature, which means they will spot you $100* when your checking account is low.
Apart from this nifty feature, Chime touts no hidden fees, no monthly fees~, no foreign transaction fees, and a $0 minimum opening balance~.
As a digital-first financial app, Chime is well suited to allow you to manage your finances on the move all from your mobile device. Even with no local branches, Chime makes it incredibly easy for you to deposit checks or withdrawal money.
To round out why we like Chime, they also have an early direct deposit program for its customers. Once enrolled in this program, you are eligible to receive your paycheck up to two days early with direct depositˆ.
Chime also has a feature on their mobile device that allows you to pay your friends (‘Pay Friends’) for free. Watch out Venmo, because with Chime it is free.
Finally, Chime has a network of over 38,000+ fee-free MoneyPass® and Visa® Plus Alliance ATMs, and over 30,000+ lucrative cash back locations.
Easily locate an ATM with their built in ATM Finder in the Chime smartphone application.
If you are ready to say goodbye to overdraft fees˜, then sign up for Chime. It is free and easy.
Learn More: Chime Bank Review
#2. Axos Bank
Axos is an online bank that offers a powerful rewards checking account that has no fees. That’s right, no fees.
With Axos Bank you can choose between between five different checking accounts:
- Essentials Checking
- Rewards Checking
- First Checking
- CashBack Checking
- Golden Checking
However, today we are highlighting the first three choices: Essentials, Rewards, & First Checking. These checking accounts all offer no overdraft or insufficient funds fees.
Better yet, these elite checking accounts also have no monthly maintenance fees, allowing you to get the best bang for your buck.
Monthly Fees: $0
Minimum Opening Balance: $0
- No “Hidden” Fees
- Earns a Stellar 1.25% APY
- Earn Rewards on Your Purchases
- Domestic ATM Fees are Reimbursed
Alas, if you are looking for more than just a checking account, then look no further. Axos Bank also offers their customers a high yield saving accounts, mortgages, mortgages refinancing, auto loans and more.
Axos Bank is truly a one stop shop.
Avoid any and all fees with Axos Bank. It is our Top Choice.
#3. Capital One 360 Checking Account
As one of the most well-known financial institutions in America, Capital One’s 360 Checking Account approaches overdraft fees in four unique ways.
- Automatically Decline: If your account lacks the necessary funds then it will decline your transaction automatically. This protects you from entering a negative balance on your checking account.
- Grace Period: Capital One will give you one full business day to transfer money into your checking account to cover the cost of your overdraft transaction. If you fail to do this, then sadly you will face a $35 flat fee.
- Transfer from Savings Account: Use available funds from your savings account to cover the cost of your overdraft expense. This is straightforward and can be done either from your mobile device or on the Capital One website.
- Overdraft Line of Credit: Capital One will offer you a loan to offset the cost of your overdraft. However, with this loan, you will have to pay interest.
With Capital One 360 Checking Account, you have plenty of options to avoid paying a steep fee for a common overdraft.
Apart from their checking account, Capital One also offers auto loans, business services, credit cards, and a saving account. Rest easy, your financial needs will be met with Capital One.
#4. Discover Cashback Debit
Most checking accounts do not offer rewards; however, Discover’s does. Redefining what it means to have a checking account, Discover offers a sweet cashback debit online checking account.
With Discover, you will earn 1.0% cashback on all purchases (up to $3,000 per month). If that isn’t enough, this account has no fees. Yes, you read that right – no fees.
Here is how Discover handles the nuances of an overdraft.
With your Cashback Debit Checking Account, you can link it to a saving or money market account which you can then use those funds to cover your overdraft. This feature is a great way to protect yourself from a hefty fee.
Additionally, with Discover you can open a retirement account, savings account, or even a lucrative money market account. Fret not, if you are in dire need of support, simply call their 24/7 customer service hotline.
#5. Charles Schwab
Known primarily as a world class brokerage firm, Charles Schwab also offers a checking account. With Schwab, you do not have to worry about a monthly service fee, account minimum, or a foreign transaction fee.
Better yet, enjoy unlimited ATM fee rebates worldwide.
To protect you from an overdraft fee, Charles Schwab will automatically pull money from your Schwab brokerage account if you have one.
However, it is important to note, that if your brokerage account is also low on funds, then you may encounter a $25 insufficient funds fee.
As you can imagine, the Charles Schwab checking account is best for individuals who already rely on Schwab for their investing needs.
On a side note, if you are looking to start investing, then Charles Schwab is a great place to start as they are notorious for low-fees, customer service, and a great platform.
#6. Ally Bank
Paving the way for digital banking, Ally offers an overdraft protection plan. Once you sign up, Ally will link both your saving and checking account. So, once your checking account balance begins to near towards zero, Ally will immediately move funds (approximately $100 each time) from your saving account into your checking account to protect you from an overdraft violation.
Does the Ally Overdraft Protection Plan cost money? No! Ally will move funds from your saving account into your checking account free of charge.
The only downside with Ally is that if you do not enroll into their overdraft protection plan, then you will face a small $25 overdraft fee, but again, this is easily avoidable.
Aside from their standard checking account, Ally also offers one of the best investing experiences, mortgages, loans, competitive CD rates, high yield saving accounts, and everything in between.
Learn More: Ally Bank Review
Pioneering the zero-fee banking experience, Fidelity offers a checking account with overdraft protection. If you sign up for this service, you will link your checking account to either a saving or brokerage account.
So, if you encounter an overdraft, they can easily transfer money from one of your linked accounts to help offset the transaction.
If overdraft protection is not for you, do not worry. Instead, Fidelity will just decline your card, allowing you to avoid an overdraft situation.
As a leader in the investment industry, Fidelity offers a world-class user experience apart from their checking account.
Whether you are on the market for a new online broker or looking for a checking account with no overdraft fees, Fidelity is a top choice.
Aspiration is truly a revolutionary FinTech firm that offers a no overdraft fee checking account. With Aspiration you set the price. Yes – let me reiterate – you set the price.
So, if you want zero fees for all your financial needs then this is your best bet. Or, if you have a giving heart and want to contribute to making this world a better place, then you can elect to pay Aspiration a minimal fee.
Standout Benefits of Aspiration:
- 0.25% APY Cash Management
- Spend & Save Account – No Overdraft Fees
- Professionally Managed Investing Funds – These funds are all socially conservative and completely fossil fuel free
- Cash Back Rewards
- Five Free ATM Withdrawals a month
Here is the catch. Aspiration is a socially responsible organization (certified B Corp), which means they put 10% of their earned revenue towards social causes, such as health, education, water, poverty, human rights, and the environment.
Aspiration is in the business of paying it forward.
As you can see, Aspiration operates at the intersection of financial services and social responsibility. While delivering a phenomenal user-experience, they are motivated more than ever to bring forth everlasting change in local communities worldwide.
#9. TIAA Bank
TIAA Bank offers an interest-bearing checking account with free overdraft protection. Like the other accounts we have mentioned above, to qualify for this service you need to link a savings account.
As you can imagine, if you are low on funds, TIAA will automatically transfer funds from your linked account to your checking account so you can avoid an overdraft penalty.
With a TIAA checking account you get an interest rate (around 1.0% APY), no monthly maintenance fees, mobile check deposits, a nifty debit card, ATM reimbursements and more.
Summary: Best Checking Accounts with No Overdraft Fees
As you can see, there are multiple options you have – as a consumer – if you are looking for a checking account with no overdraft fees. The accounts we listed above prioritize your preferences and created a financial product that meets your needs.
Ultimately, you want to choose a checking account that aligns with your personal financial needs. Are you looking for an account with physical branch locations? Or are you fine banking completely from your mobile device or personal computer? These are just a few questions you need to consider before you make a smart choice.
Chime is a financial technology company. Banking services provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC
˜ Out-of-Network cash withdrawal fees apply. Third-party and cash deposit fees may apply.
^ Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
* Chime SpotMe is an optional, no fee service that requires $500 in qualifying direct deposits to the Chime Spending Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases initially, but may be later eligible for a higher limit of up to $100 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. SpotMe won’t cover non-debit card purchases, including ATM withdrawals, ACH transfers, Pay Friends transfers, or Chime Checkbook transactions. See terms and conditions
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank or Stride Bank, N.A., Members FDIC.