Summary:

It is possible to get your overdraft fees refunded with a quick phone call to your institution, especially if you have a good relationship. However, this doesn’t guarantee a refund. To ensure you have the best chance of receiving a refund on your overdraft fees, make sure you review your institution’s policy on overdraft fees.

If you’ve ever been charged a bank overdraft fee, you know how much of a pain it can be. Overdraft fees are a common penalty that many people face when they overdraw their accounts. Luckily, you can get an overdraft fee refunded or waived.

Keep reading to find out how you can take control of your finances and avoid these exorbitant bank fees.

How to get an overdraft fee refund

Overdraft fees are a pesky part of the banking experience, and something most of us will encounter at one point or another. Fortunately, it’s possible to get your fee refunded in some cases. Here are a few tips on how to go about it:

Check your institution’s policy on overdraft fees. Some financial institutions will automatically refund the fee if you’ve been hit with one in the past. Others will only refund the fee if you call and request it.
Put a call through to your institution as soon as possible. If your bank or credit union doesn’t have an automatic refund policy, call and speak to a customer service representative. Explain that you were charged an overdraft fee and ask if there’s any way to get it refunded. They may be willing to waive the fee if it’s your first time being overdrawn or if you have a good history with the institution.
File a complaint. If they still refuse, you can file a complaint with the Consumer Financial Protection Bureau. Finally, if all else fails, you can always try small claims court, though that process may cost more than the overdraft fees.

If the customer service representative doesn’t refund your overdraft fee at first, don’t give up! With a little persistence, you may be able to get your overdraft fees refunded.

What is an overdraft fee?

An overdraft fee is a fee charged by a financial institution to a checking account when a customer attempts to withdraw more money from their account than they have available. This could be for several types of purchases, including a transfer (between accounts or a wire transfer), ATM withdrawal, online payment, or debit card purchase.

Overdraft fees cost around $35 per transaction, though the exact amount can vary depending on the institution. This means that if you’re constantly overdrawing your account, you may be charged multiple fees per day.

Overdraft fees are one of the most expensive fees banks charge, so it’s important to be aware of them and know what your bank account balance is. Though your financial institution may agree to waive overdraft fees, you shouldn’t rely on that option. If you can avoid overdrawing your account, you’ll likely save yourself a lot of money in fees.

How to calculate overdraft fees

Most banks and credit unions charge a flat fee for overdrafts. However, some institutions charge a percentage of the overdraft amount, which can be anywhere from 1% to 5%. To calculate this fee, simply multiply the overdraft amount by the percentage. For example, if you have an overdraft of $100 and your bank charges 5%, your overdraft fee would be $5.

If you’re unsure of your institution’s overdraft fee policy, you can always give them a call or look it up on their website.

Why do credit unions and banks charge overdraft fees?

Financial institutions charge overdraft fees because, when you spend more money than you have in your account, your institution has to cover the difference. The overdraft fee is the institution’s way of recouping that cost. Since you technically can’t overdraft a credit card, this fee primarily applies to checking and savings accounts.

Overdraft fees can be very costly and may add up quickly if you’re not careful. That’s why it’s important to keep track of your account balance and to only spend what you have.

If you do find yourself in an overdraft situation, the best thing to do is to bring your account back into the black as soon as possible. Many institutions may waive the fee if you do this within a certain time frame.

How to avoid overdraft fees in the future

When you have a checking account, you may be automatically enrolled in an overdraft protection plan if your institution has one. This means that if your balance falls below a certain amount, your bank will cover the cost of the transactions that put your account over the limit.

There are a few things you can do to avoid overdraft fees in the future:

Check your account balance. Make sure your bank account has enough money in it to cover any transactions that would put it over the limit. If you don’t have enough money in your account, your bank may charge you an overdraft fee.
Avoid large purchases with a debit card. Never use your checking account to make large purchases or withdraw large amounts of money. If you do, your bank may charge you an overdraft fee.
Use a budget. A budget can help you keep track of your spending and make sure you don’t overspend in any one area. This can help you avoid an overdraft fee if you know exactly how much money you have to spend each month.
Set up account alerts. Many banks offer account alerts that can notify you when your balance gets low. This way, you can transfer money into your account before you overdraft and incur fees.
Get the right checking account. Research checking bank accounts with no overdraft fee and compare the pros and cons of these accounts. You may find one with better perks than your current institution.

To get a better idea of what checking accounts you qualify for, take a look at some of the account options below.

Overdraft protection

Overdraft protection is another way to protect yourself from overdraft fees. This is an optional service that banks offer to their customers to protect them from the consequences of overspending. Though you’ll have to pay a fee for this service, you can link a line of credit or a savings account to cover any overdrafts.

Overdraft protection can be a great safety net for those who are worried about accidentally spending more than they have in their checking account. When opening a bank account, it’s important to clarify whether they offer overdraft protection or not.

Overdraft vs. non-sufficient funds

Though they sound similar, there are a few differences between non-sufficient funds (NSF) and an overdraft. That said, both can result in incurred fees.

Non-sufficient funds. NSF occurs when you don’t have enough money in your checking account to cover a transaction. The transaction will usually be declined, and you may be charged an NSF fee.
Overdraft. An overdraft occurs when you have insufficient funds to cover a transaction, but the transaction is still processed. This may happen if you have arranged for overdraft protection on your account. You may be charged an overdraft fee as well as interest on the amount of the overdraft.

It’s important to know the difference between NSF and overdraft fees so you can avoid them if possible. If you do incur either type of fee, be sure to keep track of it so you can learn to budget better in the future.

FAQs

Are overdraft fees charged immediately?

As is with most things, the answer here will be highly dependent upon your financial institution and its respective rules. While some banks may assess an instantaneous fee to your account, others will allow five to seven business days for you to correct your balance before charging an overdraft fee.

How many times can I overdraft?

The number of times an account holder can overdraft is a bit of an ambiguous area. While some institutions will allow for a few overdrafts per day, some might allow up to 10 or even a certain dollar amount.

Also worth considering here is your account status with your institution. While there’s no hard and fast rule on the number of overdraft fees that will get you in trouble, financial institutions may decide to close your account at their discretion if it remains in the negative too long or they notice a habit of overdrafts.

How long do you have to pay back an overdraft?

Most institutions will allow customers about five to seven business days to pay back an overdraft. This could mean only making your account positive again or both addressing your account and paying an overdraft fee. Of course, this timeline will vary between institutions.

Depending on your institution, some credit unions and banks refund overdraft fees if you address the situation quickly.

Can I get other bank fees refunded besides overdrafts?

Many institutions (especially online banks and credit unions) have started to offer accounts with little to no fees as a marketing tactic. This is great for us, but there are still a large number of traditional institutions that do charge a wide array of fees.

For instance, many institutions still charge ATM fees, international transaction fees, and even monthly service fees. Many of these are non-negotiable bank fees, though you may be able to get a one-time refund if you ask nicely.

However, keep in mind that there are plenty of banking options out there that offer accounts with no monthly fee, no overdraft fees, no ATM fees, and more perks too. With this in mind, remember to shop around and compare your options before signing the dotted line.

How many overdraft fees or other bank fees can I get refunded?

This is another gray area. While it is possible to get overdraft fees refunded, most institutions don’t publicly name a certain number of times you can do this, or even that they’re willing to at all. It’s truly an internal, customer-to-institution relationship situation where the institution decides at their own discretion when, if, and how many times they’ll waive a fee.

Key Takeaways

It’s possible to get overdraft fees refunded with enough determination. Oftentimes, all it takes is a quick call or message to your institution.
If you ask your institution for a refund and they refuse, you can always file a complaint or take the institution to small claims court. However, this may end up being an expensive option.
If you’re prone to over-drafting your account, you may want to open an account with no overdraft fees.
Loyalty is valuable when it comes to your institution, but don’t be overly loyal. Make sure to consistently shop around for better alternatives.

View Article Sources

Overdraft and Account Fees — Federal Deposit Insurance Corporation
I opened a “free” checking account but there are fees charged on my account. Can my bank/credit union do that? — Consumer Financial Protection Bureau
Bank Accounts: Fees & Terms — HelpWithMyBank.gov
Checking Account Fees (2022) How To Avoid Them — SuperMoney
Mobile Check Deposit Limits for the Top U.S. Banks (2022 Update) — SuperMoney
All You Need to Know about Mobile Wallets: What the Future of Payments Looks Like — SuperMoney
How to Open a Checking Account — SuperMoney
What is Direct Deposit? How To Deposit Your Paycheck Safely — SuperMoney
What Are The Benefits Of A Checking Account? — SuperMoney
Best Checking Accounts With No Overdraft Fees — SuperMoney
Best Checking Accounts — SuperMoney
UBS Bank USA Checking Account — SuperMoney
Chase Bank Total — SuperMoney
U.S. Bank Smartly™ Checking — SuperMoney
Upgrade – Rewards Checking — SuperMoney

Austin Payne

articles from Austin

How To Get Overdraft Fees Refunded