Photo by Steve Pancrate
Some banks might hit you with over $100 in overdraft fees in a single day. And, it adds up. Research by the Consumer Financial Protection Bureau (CFPB) shows many top banks charge between $10 to $35 each, Bankrate reported. Some charge for three to five overdrawn transactions in a day. But now, banks are slowly eliminating these fees thanks to pressure from consumer groups and regulatory bodies.
Here are three banks that have eliminated Non-Sufficient Fund (NSF) fees and developed strong digital banking capabilities to empower their customers.
In 2021, Capitol One made a significant move by eliminating overdraft fees. Qualifying Capital One 360 Checking customers can opt into NSF protection. Capital One will cover transactions like automatic bill payments, recurring direct debits, and checks. The bank won’t charge you, but it asks you to deposit funds “promptly,” CNBC reported.
Citibank won’t charge fees for going below $0 on their low-fee Access Checking or Regular Checking accounts. Citibank automatically transfers funds from a linked savings account to cover any shortfall, and unlike some other banks, this service is free. And under its Checking Plus line of credit, you can borrow money up to a specific limit to cover transactions that would otherwise be declined. Interest is charged on what you borrow, with the current variable APR at 20.50 percent.
In 2022, Bank of America stopped charging NSF fees and reduced overdraft fees to $10 from $35. No more than two overdraft fees may be charged in a day. The bank also eliminated the $12 overdraft protection transfer fee through its Balance Connect linked accounts program. But the changes came after a government crackdown on Bank of America. Bank of America earned $392 million in revenue from overdraft and NSF fees in 2022, according to the Consumer Financial Protection Bureau. In July 2023, the CFPB said that Bank of America had participated in illegal activities, including double-dipping on NSF fees. The CFPB ordered the bank to pay $250 million in fines and compensation to settle multiple claims, Bankrate reported.
Photo by Steve Pancrate: https://www.pexels.com/photo/an-atm-machine-on-the-side-of-the-road-during-night-time-4135324/
