What Is an Overdraft Fee?

An overdraft fee is a charge imposed by a bank when you make a transaction that exceeds your checking account’s available balance. The bank covers the difference for you, but this service comes at a cost. Overdraft fees can accumulate quickly, especially if multiple transactions occur while your account is overdrawn.

Can You Get Overdraft Fees Waived?

Yes, many financial institutions allow you to get overdraft fees waived, but it often depends on the bank’s policies. Here are some steps to help you get those fees refunded:

• Simply ask for a refund: Contact your bank’s customer support and request a refund. Explain the reason for your request, such as a delayed deposit or an unexpected autopayment.
• Go up the authority chain: If the initial customer service agent cannot waive the fee, ask to speak with a supervisor or manager.
• Consider switching banks: If your bank is unwilling to waive the fee, look for another bank with more lenient overdraft policies.

How Much Do Overdraft Fees Cost?

According to the Federal Deposit Insurance Corporation (FDIC), overdraft fees average around $30 per transaction. Here are the overdraft fees from some well-known banks:

• Alliant Credit Union: No overdraft fees
• Ally Bank: No overdraft fees
• Axos: No overdraft fee
• Capital One: No overdraft fee
• Chase: $34 per charge if your account is overdrawn more than $50 at the end of the business day
• Citi: No overdraft fees
• Navy Federal Credit Union: $20 per charge if the account is overdrawn over $15 at the end of the business day
• Wells Fargo: No overdraft fee for its Clear Access Banking checking account and $35 for other checking accounts

How to Avoid Overdraft Fees

Preventing overdraft fees is often easier than dealing with them after the fact. Here are some tips to help you avoid overdraft charges:

• Monitor your bank account balance: Regularly check your account balance through your mobile banking app or computer to stay up-to-date.
• Opt out of overdraft protection: Federal regulations allow you to opt out of overdraft protection, which can prevent your debit card from being declined if there isn’t enough money in your account.
• Sign up for alerts: Many banks offer low balance alerts to notify you when your account balance falls below a specific threshold.
• Link to another account: Check if your bank allows you to link an additional account to your checking account to help prevent overdrafts.
• Choose a fee-friendly bank: If you frequently incur overdraft fees, consider switching to a bank that doesn’t charge them.

Reap the Benefits of Multiple Checking Accounts

If you prefer the convenience or other features of your current bank despite the hefty overdraft fees, consider opening another checking account. This way, you can take advantage of features not offered by your current bank. For example, you could designate one account for interest-earning and paying bills and another for accessible cash or in-person service.

When comparing banks, consider each bank’s interest rates, minimum balance requirements, fees, and other features to find the checking account that best suits your financial needs.