How to Get Overdraft Fees Refunded - Experian (2024)

What Is an Overdraft Fee?

An overdraft fee is a charge a bank imposes when you make a transaction that exceeds your checking account's available balance, and the bank covers the difference for you. If several transactions settle the day your account dips into the negative, your bank may slap you with an overdraft fee for each transaction.

Additionally, some banks charge daily overdraft fees for each day your account remains below $0. Overdraft fees, which can run up to $35 each, can add up quickly and make it challenging to bring your account current.

Thankfully, overcharging doesn't always trigger an overdraft fee if the shortage falls below a specific threshold. For example, Chase doesn't charge overdraft fees if your account is short by $50 or less at the end of the business day. And some banks don't charge overdraft fees at all.

If your checking account becomes overdrawn, deposit enough funds into your account to cover both the overdraft amount and any overdraft fees you incur. If you don't deposit money to cover the negative balance, the bank will deduct the amount you owe from your next deposit.

In a worst-case scenario, your bank could close your account and assign any outstanding debt to a debt collection agency if you fail to restore a positive balance. Given the consequences of an overdrawn account, it's wise to get overdraft fees refunded whenever possible.

Can You Get Overdraft Fees Waived?

Yes, you can get overdraft fees waived at many financial institutions, but it may depend on the bank. Some banks may have a formal process for fee waivers or may provide auto-deposits from connected accounts. Here are some steps for getting overdraft fees refunded:

1. Simply ask for a refund. Sometimes, the best solutions are the most straightforward. Contact your bank's customer support office or speak with a bank teller directly and request a refund. Explain the reason for your request, such as a delayed deposit or an autopayment that was larger than usual. Many banks understand the value of working with loyal customers with a track record of responsible banking.
2. Go up the authority chain. If a customer service agent claims they have no authority to waive an overdraft fee, ask to speak with a supervisor or manager who does. Remember, bank representatives are more likely to work with you if you remain calm and respectful through the process.
3. Don't be afraid to switch banks. If your bank is unwilling to waive the fee, consider switching to another bank. You may find a bank with a less stringent overdraft fee policy or, better yet, one that doesn't charge overdraft fees.

Keep in mind, banks and credit unions are not allowed to charge you an overdraft fee for a one-time debit card transaction or ATM withdrawal unless you opt in for that protection. However, they can charge overdraft fees without your permission if they cover a check or electronic payment that would overdraw your account. If you haven't opted into overdraft protection and you receive a fee for a debit transaction or withdrawal, you can file a complaint with the Consumer Financial Protection Bureau (CFPB).

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, credit unions and online 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. Also, there is no fee on transactions of $5 or less.
• Wells Fargo: No overdraft fee for its Clear Access Banking checking account and $35 for other checking accounts.

How to Avoid Overdraft Fees

Asking your bank to waive overdraft fees can help you wipe out expensive overdraft fees. If you'd like to avoid overdraft charges in the first place, consider the following tips:

• Closely monitor your bank account balance. The more you know about your money, the less likely you are to overextend your bank account and incur overdraft fees. Regularly checking your account balance through your mobile banking app or computer can help you stay up-to-date and avoid unnecessary fees.
• Opt out of overdraft protection. Federal regulations allow you to opt out of overdraft protection at any time. Without overdraft protection, your debit card may be declined if there isn't enough money in your account to cover a transaction, and you won't incur an overdraft fee.
• Sign up for alerts. If your bank offers them, sign up for low balance alerts to receive messages whenever your account balance falls below a specific threshold.
• Link to another account. Check to see if your bank allows you to link an additional account to your checking account to help prevent overdrafts. You may be able to connect a checking account, savings account, credit card or line of credit to automatically transfer funds to cover transactions and help you avoid overdraft fees.
• Choose a fee-friendly bank. If you receive overdraft fees often, take steps to improve your money habits and consider switching to another bank that doesn't charge overdraft fees. Before changing banks, compare other potential fees, including returned check fees, monthly maintenance fees and ATM surcharges.

Reap the Benefits of Multiple Checking Accounts

You may be able to waive an overdraft fee by requesting a refund with a bank agent or supervisor. Alternatively, you can preemptively stave off overdraft fees by switching to a bank that doesn't charge them.

But what if you prefer the convenience or other features of your current bank, despite the hefty overdraft fees you may incur? In that case, it may make sense to open another checking account to take advantage of other features not offered by your current bank. For example, you could designate one online account for interest-earning and paying bills and another with a local credit union or traditional bank for accessible cash or in-person service.

If you decide to switch banks or open a separate account, compare each bank's interest rates, minimum balance requirements, fees and other features to find the checking account that best suits your financial needs.