Best Checking Accounts With No Overdraft Fees in 2022

Watching your checking account balance dwindle to $0 isn’t a great feeling—and getting slapped with a fee because you’ve overdrawn your account is even worse. While you might think an overdraft fee is just par for the course when it comes to checking, there are plenty of accounts that don’t allow you to overdraft or provide a straightforward, fee-free method of overdraft protection. You just need to know where to look.

That’s why we’ve identified the best checking accounts for avoiding overdraft fees. If you’re constantly finding yourself paying a fee for falling into the red, one of these banks might be a good fit for you.

Best checking accounts that do not allow you to overdraft

Topping our list of the best checking accounts with no overdraft fees are ones that do not allow you to overdraft your account, period. Instead, your transaction is simply declined.

While the experience of having your card declined might be frustrating, being incapable of overdrafting is the easiest way to avoid getting hit with overdraft fees. While your checking account does not affect your credit score, if your overdraft amount is ultimately sent to collections, that could appear on your credit report and ding your credit score.

That’s why the best checking accounts that avoid overdrafting altogether outrank ones that offer overdraft protection plans. If you struggle with self-control and find yourself overspending time and time again, a checking account that does not allow you to overdraft could be a good match.

To make the cut, checking accounts had to have zero overdraft or insufficient funds fees. While offering an APY was not a requirement, it was an added bonus we considered when developing this list.

Chime Checking Account

Chime is another fintech firm that offers attractive incentives along with its no-overdrafting policy. Those incentives include no fees, such as monthly maintenance fees or minimum balance fees, and access to over 60,000 fee-free ATMs.

The company doesn’t just offer a no-overdrafting policy, but it goes one step further with its SpotMe feature. With SpotMe, Chime will allow you to overdraft up to $200 without a fee and instead, just apply your next deposit to whatever amount Chime covered when you were in the red. You then have an option to leave a “tip,” although it is not required. SpotMe limits range from $20 to $200, dependent on factors like your account history and activity.

Other noteworthy features of Chime’s Checking Account include:

• An early direct deposit feature, which allows you to get paid up to two days before your direct deposit hits your Checking Account.
• A built-in, automatic savings feature along with a Save While You Spend tool. This tool automatically rounds up your transactions to the nearest dollar and deposits the difference into your savings account.

Chase Secure Banking

Chase Secure is a modern, checkless checking account, meaning you won’t be able to write paper checks with this account. But in this day and age, most banking is done digitally, where you’ll be able to pay your bills, send and receive money, and deposit traditional checks.

Chase will decline or return any transactions you can’t cover, but in the rare instance an overdraft accidentally happens, they won’t charge you. With your account you’ll have access to your money at 16,000 ATMs. The monthly service fee is $4.95 and you won’t earn interest on this account.

Other pluses for Chase include:

• Chase charges no fee for money orders or cashier’s checks.
• Unlike online-only banks, Chase has almost 4,700 brick-and-mortar branches if you prefer doing your banking business in person.

Bank of America Advantage SafeBalance

However, your account may fall into a negative balance if:

• Your card is authorized for one amount but the final amount ends up being higher
• A scheduled bill payment is deducted from your account but you have insufficient funds
• When you get charged a fee and your balance is less than the fee

The Bank of America Advantage SafeBalance account charges a monthly maintenance fee of $4.95, but is waived if you enroll in its Preferred Rewards program or if you are a student under the age of 24.

Read our Bank of America review.

Best checking accounts with free overdraft protection plans

While checking accounts that don’t allow overdrafting are ideal, there are other accounts great for those who find themselves often going overboard. A number of checking accounts—many of which are offered by traditional brick-and-mortar banks—offer overdraft transfer protection plans with no fees.

There are a number of benefits associated with accounts like this: You’re protected from overdrafting and any fees or interest that might come with it but you are also safe from embarrassment or inconvenience of having your card declined if you have insufficient funds.

There are drawbacks, though, that come with overdraft protection plans. In some cases, they come with strings attached, like needing to have sufficient funds in any accounts you link to cover the costs of a potential overdraft. If you aren’t careful, they can also drain the savings you worked so hard to build up.

We identified the best checking accounts that offer free transfers for overdraft protection if certain conditions are met. To be included on our list, accounts also had to have no monthly fees or minimum balance requirements. While offering an APY was not a requirement, it was considered as an added bonus.

Axos Rewards Checking

With a generous APY and no fees, online bank Axos offers a checking account that stands apart from the pack. Axos’ Rewards Checking account boasts an APY ranging from 0.40% to 3.30%, depending on your direct deposits and how many monthly transactions you make with your debit card. The account has no maintenance fees and no monthly minimum balance requirements, however there is a required $50 to open an account.

Axos says it does not charge overdraft or NSF fees for customers of its Rewards Checking account. The bank also offers overdraft protection, and will transfer available funds from a linked account, which you’ll need to keep active. This account also has unlimited domestic ATM fee reimbursement.

Capital One 360 Checking

• Auto-decline: Automatically declines your transaction if you do not have sufficient funds in your account.
• Free transfer: Automatically transfers funds from your savings account to cover the cost of your overdraft.
• No-fee overdraft: Even if the bank approves a transaction you can’t afford, Capitol One won’t charge you a fee. (Note: If you were previously enrolled in Capitol One’s Next Day Grace program, you’ve been automatically converted to this no-fee overdraft option.)
• Overdraft line of credit: Loans you the funds to cover an overdraft. You have to pay interest on the overdrawn amount for the length of time you borrow funds.

Read our Capital One review.

Ally Bank Interest Checking Account

Ally Bank is often touted for the relatively high interest it offers on its savings products, but it’s Interest Checking Account is worth highlighting, too. The Ally Bank Interest Checking Account has no monthly maintenance fees and no minimum required in order to open an account. It also has an APY of 0.10% to 0.25%, depending on your balance.

Ally Bank doesn’t charge overdraft fees. Ally Bank will decline the transaction if there are insufficient funds. However, you can easily waive this fee by enrolling in Ally Bank’s free Overdraft Transfer Service, which links your checking account to your online savings or money market account to cover overdrafts. Funds will be automatically transferred in $100 increments, and overdraft transfers count toward your transaction limits.

The Ally Bank Interest Checking Account also offers attractive features such as:

• Reimbursement of ATM fees nationwide, up to $10 per statement cycle.
• Ability to transfer funds through the Ally Skill on Amazon Alexa.

Read our Ally Bank review.

Discover Cashback Debit Checking

Discover’s online checking account takes a different approach to banking; instead of offering an APY, the Discover Cashback Debit Checking account features 1% cash back on purchases made with your debit card. The checking account also touts more standard features such as no monthly maintenance fees and no minimum deposit required in order to open an account.

For overdrafts, the Discover Cashback Debit Checking account is eligible for enrollment in a fee-free overdraft protection service, which uses funds from a linked account to cover overdrafts. You also won’t have to worry about insufficient fund fees.

The Discover Cashback Debit Checking account also offers the following features:

• 1% cash back on up to $3,000 in debit card purchases each month (Terms Apply).
• Free withdrawals at over 60,000 ATMs nationwide.
• Ability to freeze your debit card via its app.

Read our Discover Bank review.

What is an overdraft?

It’s essential to understand exactly what an overdraft is. According to the Consumer Financial Protection Bureau (CFPB), an overdraft is when you don’t have enough money in your account to cover a transaction but the bank pays for that transaction regardless. Overdrafts often occur with products linked to checking accounts like debit cards, ATM withdrawals and automatic bill payments.

Financial institutions vary widely when it comes to how they approach overdraft charges. Some will automatically decline all transactions that would make an account overdraft, while others will cover the overdraft but charge a fee. Sometimes the overdraft transaction is covered by a linked account (such as a savings or brokerage account), either for free or for a fee, while other times funds are provided by a line of credit you have to pay interest on.

How many overdraft fees can you get charged in a day?

Overdrafts are certainly a slippery slope. Not only do they push your account further into the red, but the fees stacked on top of them can rapidly get out of control. Some financial institutions will limit the number of overdraft fees you can be charged in one day, but others allow multiple overdraft fees to be charged in a single day. PNC Bank, for example, caps its $36 overdraft fee at one per day for certain accounts while Wells Fargo limits its $35 overdraft to three per day.

In 2010, the Federal Reserve passed an overdraft protection law banning banks from automatically enrolling customers in overdraft protection for one-time debit or ATM transactions. Previously, banks could automatically enroll customers in overdraft protection plans that sometimes came with steep, overdraft fees. Now, customers have to opt-in to such plans, or their card will be declined — although they still might face a NSF fee.

NSF fees vs. overdraft fees

Many financial institutions treat NSF fees and overdraft fees interchangeably, but the two have nuanced differences. An overdraft fee is charged when the bank pays for that debit that plunged your account into a negative balance. With an NSF fee, the bank does not cover the debit amount.

Almost all banks have the same NSF and overdraft fee, and they will not charge you both for the same transaction. However, some banks differentiate the two towards your daily fee maximum. So, if a bank has a maximum of four overdraft fees per day but counts NSF fees separately, you could end up paying over four penalties in a single day.