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In March 2020, financial services firm Ally Bank waived overdraft fees as part of its Covid relief plan to give the bank’s most financially vulnerable customers a much-needed reprieve.

And yesterday morning – less than a week after lawmakers toast bank CEOs on Capitol Hill – Ally said he was definitely ending overdraft fees on all accounts to keep people from falling behind. financial.

“We know money can be stressful and confusing,” said Diane Morais, president of personal and business banking at Ally Bank, in a statement. Press release. “Overdraft charges can be a major cause of anxiety. It became clear to us that the best way to relieve this anxiety was to eliminate these charges.”

Overdraft fees are particularly expensive and onerous for people living paycheck to paycheck. Online banks and traditional banks charge overdraft fees, typically between $ 15 and $ 35 per event, and the costs add up quickly.

Americans paid $ 12.4 billion in overdraft fees in 2020. The latest FinHealth expense report shows that 80% of overdraft fees are paid by consumers whose current account balances are consistently low. Among consumers who paid overdraft fees in 2020, 95% were considered financially vulnerable and disproportionate as Blacks and Latinx, demonstrating how overdraft fees contribute to systemic inequity within the banking industry.

Last week, at a hearing of the US Senate Committee on Banking, Housing and Urban Affairs, Senator Elizabeth Warren, D-Mass., Accused Jamie Dimon of JPMorgan Chase and other CEOs of banks in cases of not effectively communicating the easing of fees during the pandemic.

Even before the no overdraft fee decision, Ally never charged an overdraft fee for debit card transactions or charged more than one overdraft fee per day. In addition, Ally has no minimum balance requirements, no monthly maintenance fees, no ACH transfer fees and an extensive network of toll-free ATMs nationwide with over 43,000 Allpoint ATMs. .

The best free checking accounts with no overdraft fees

Not all banks have permanently eliminated overdraft fees. Most checking accounts, even those with no monthly fees, charge insufficient funds and / or overdraft fees.

Select has analyzed and compared dozens of checking accounts. Here are those from our best list of no-fee checking accounts that are also no overdraft fees:

Best with no overdraft fees

Allied interest checking account

The information on the Ally Interest Current Account was independently collected by CNBC and was not reviewed or provided by the bank prior to publication. Ally is a member of the FDIC.

  • Monthly maintenance fees

  • Minimum deposit to open

  • The minimum balance

  • Annual percentage return (APY)

    0.10% less than $ 15,000 minimum daily balance; 0.25% on a minimum daily balance of $ 15,000

  • Free ATM network

  • Reimbursement of ATM fees

    Up to $ 10 per statement cycle

  • Overdraft fees

  • Mobile check deposit

Benefits

  • Top rated mobile app
  • No minimum deposit to open an account
  • Reimbursement of ATM fees up to $ 10 per statement cycle
  • 0.10% or 0.25% APY, depending on daily account balance
  • $ 0 overdraft fee

The inconvenients

  • Online banking only (no physical locations)
  • Minimum daily balance of $ 15,000 required for 0.25% APY

Best for rewards

Discover the Cashback debit account

The Discover Cashback debit account information was independently collected by CNBC and was not reviewed or provided by the bank prior to posting. Discover is a member of the FDIC.

  • Monthly maintenance fees

  • Minimum deposit to open

  • The minimum balance

  • Awards

    1% cash back on up to $ 3,000 in debit card purchases each month

  • Free ATM network

    Over 60,000 Allpoint® and MoneyPass® ATMs

  • Reimbursement of ATM fees

  • Overdraft fees

  • Mobile check deposit

Benefits

  • Top rated mobile app
  • No minimum deposit to open an account
  • 1% cash back on up to $ 3,000 in debit card purchases each month
  • Opt for free overdraft protection
  • No overdraft fees

The inconvenients

  • No reimbursement for out-of-network ATM fees

Our methodology

To determine which chequing accounts are the best place to deposit your money with no monthly fees, Select analyzed dozens of verify accounts offered by online and physical banks, including major credit unions. We have refined our ranking by only considering current accounts that charge no monthly maintenance fees (and no captures to benefit from zero monthly fees).

While the accounts we’ve chosen in this article routinely have no monthly maintenance fees, we’ve also compared each checking account on a range of features, including:

  • No minimum balance requirement
  • Low initial deposit of $ 0 to $ 50
  • Available all over the country
  • Physical branch locations and / or online accessibility
  • Large network of ATMs
  • Ease of use and accessibility of the account
  • Customer reviews, when available

All accounts included in this list are the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) insured up to $ 250,000. This insurance protects you and reimburses you up to your balance and the legal limit in the event of bankruptcy of your bank or credit union.

Rates and fee structures for current accounts are subject to change without notice and often fluctuate based on the prime rate.

Your income depends on the associated fees and the balance you have in your checking account. To open an account, some banks and institutions may require a deposit of new money, which means that you cannot transfer the money you already had in an account at that bank. However, the five accounts listed above currently do not require any deposit when opening the account.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of Select’s editorial staff and have not been reviewed, endorsed or otherwise approved by any third party.



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