8 Best Banks for Overdrafts 2023

SoFi charges no overdraft fees, and customers can also opt into two different options to cover their accounts in case of an overdraft. The first option is free overdraft protection, which automatically transfers money from a customer's savings balance to cover the transaction. The second option is no-fee overdraft coverage, where SoFi will cover a debit card transaction that would result in an overdraft of up to $50, as long as a customer qualifies by making $1,000 or more in direct deposits per month.

Axos doesn’t charge any overdraft fees; though Axos might occasionally pay for overdrafts at its discretion, transactions are typically declined unless a customer is enrolled in one of Axos’ overdraft protection programs. There are two options: a free overdraft protection transfer from a linked money market or savings account, or an overdraft line of credit. The overdraft line of credit has an 18% APR, so it could be an expensive option. If a customer’s account is overdrawn from an automatic electronic transfer such as bill pay or a check, Axos may charge $25 per item, with a maximum of three charges per day. However, if the overdraft is less than $25, there is no fee.

Ally has no overdraft fees for any of its accounts, and there are two options for overdraft protection. The first option is to set up free overdraft protection transfers from a linked Ally savings account or money market account. The transfer will be rounded to the nearest $100 and sent to the customer’s checking account. The second option is Ally’s CoverDraft service, which provides up to $250 in coverage in case a customer overdrafts. A customer can qualify for CoverDraft 30 days after making a $100 deposit into their checking account, which means they receive basic overdraft coverage up to $100. If a customer deposits at least $250 for two months in a row, they qualify for up to $250 in coverage. If a customer overspends, their next deposit will apply to their negative balance, and they have 14 days to bring their account back to a positive balance.

One doesn’t charge any overdraft fees or nonsufficient funds fees. If a customer deposits at least $500 into their One account in the previous 31 days, they have access to up to $200 in overdraft coverage linked to their Spend Pocket, which is One’s version of a checking subaccount. The negative balance is automatically repaid with the next deposit or transfer a customer makes into their Spend Pocket which should happen as soon as possible. Otherwise, One might close your account and/or report you to a consumer reporting agency.

Chime says: "Chime SpotMe is an optional service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 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. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won't cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions."

Current doesn’t charge overdraft fees because overdrafts are not permitted. If you become eligible for Current’s Overdrive program — which happens when you direct deposit $500 or more per month — and opt into it, you are given a dollar limit that you can overdraft without a fee. The limit starts at $25 and goes up to $200. Overdrive doesn’t cover any nondebit purchases, such as ATM withdrawals, checks or electronic transfers.

Varo doesn’t charge overdraft fees and will decline transactions that would result in a negative balance. If your account dips below zero from a charge amount that was changed after a transaction, such as when a restaurant adds your tip to the charge total, Varo still doesn’t charge an overdraft fee. Varo also offers a cash advance program that can help with low account balances. Customers can borrow $20 with no fee as well as incrementally higher amounts up to $250 that come with a small fee. All amounts must be paid back within 30 days. To qualify for Varo Advance, customers must have an account that’s older than 30 days, must have activated their Varo debit card and must have received $1,000 or more in direct deposits in the past 31 days.

Note that there is also a $5 monthly service fee for Self-Help Credit Union’s checking account, which is waived if you are under 24 years old, over 65 years old, make $500 in direct deposits or more per month, or if you maintain a daily combined balance of $2,500 or more in your Self-Help Credit Union accounts.