Financial institutions eliminating or reducing charges for exceeding account balances
In a significant shift for consumers, several major banks have either eliminated or significantly reduced overdraft fees, offering relief to millions of account holders. This move comes amidst a changing regulatory landscape that has impacted the broader banking industry.
Leading the charge is Citibank, which completely removed all fees related to overdrafts, overdraft protection, non-sufficient funds (NSF), and returned items since June 2022. The bank now provides linked savings accounts or credit lines to cover overdrafts without charging any fees.
Citizens Bank, another major player, offers an overdraft fee grace period since 2021. This allows customers to avoid fees by restoring positive balances by the next business day. Overdraft fees assessed are $35 per item, with a maximum of five per day. Their EverValue Checking account declines transactions with insufficient funds instead of charging fees.
Discover Bank, which has historically not charged overdraft fees, eliminated insufficient funds fees for all accounts in 2019, leading the way in consumer-friendly policies.
Fifth Third Bank eliminated NSF fees in June 2022. While it charges $37 per overdraft with a maximum of three overdraft fees per day, it exempts items of $5 or less and end-of-day overdrafts of $5 or less.
Truist One Checking offers no overdraft fees and provides a Balance Buffer that allows overdrawing up to $100 without fees when qualified.
However, in a recent turn of events, Congress overturned the Biden-era Consumer Financial Protection Bureau (CFPB) rule that capped overdraft fees at $5 for large banks, restoring the ability for banks to charge higher fees as per pre-2025 structures. Despite this, many banks have voluntarily reduced overdraft fees, leading to a significant drop in total annual overdraft fees from $11 billion to $6 billion.
Recent consumer protection bills propose capping overdraft fees at $15 with limits on the number of fees per day, but these are still under discussion and not yet federal law.
The following table summarises the overdraft fee policies of these banks as of mid-2025:
| Bank | Overdraft Fee Policy in 2025 | |------------------|----------------------------------------------------------------| | Citibank | Eliminated all overdraft and NSF fees | | Citizens Bank | Grace period to avoid fees; $35 fee max 5 per day; option to decline transactions instead of overdrawing | | Discover Bank | No overdraft or NSF fees | | Fifth Third Bank | NSF fees eliminated; $37 overdraft fee max 3 per day; exemptions for small overdrafts | | Truist One | No overdraft fees; Balance Buffer up to $100 |
While these banks represent the most notable examples of reducing or eliminating overdraft fees, the repeal of federal caps may lead some other banks to increase fees again over time. However, it is important to note that many banks have made significant strides in reducing overdraft fees, offering a more affordable banking experience for their customers.
[1] Source: Bankrate's most recent checking account and ATM fee survey [2] Source: Truist Bank official website [3] Source: Congress.gov [4] Source: Consumer Financial Protection Bureau [5] Source: Consumer Reports
In the evolving landscape of personal-finance and business practices, several major banks have demonstrated a customer-focused approach by either removing or significantly reducing overdraft fees. For instance, Citibank has completely abolished all associated fees since June 2022, while Truist One Checking offers no overdraft fees and a Balance Buffer for up to $100. These changes have contributed to a decline in total annual overdraft fees from $11 billion to $6 billion.
