You should never pay overdraft fees again

Last year, banks and credit unions collected billions of dollars in overdraft fees. In fact, according to the Consumer Financial Protection Bureau, almost 23 million American households are affected by overdraft fees every year.

If overdraft fees have impacted you, you know how frustrating they can be. Traditionally, when someone overdrafts, their bank charges them a fee. According to Bankrate, the average overdraft fee is around $26, which is a pretty steep price to pay for making a math error or forgetting to tell your spouse about a check you wrote on your joint account. When this happens multiple times, this fee can add up.

Here is a short guide on overdraft fees and how you can avoid them as an Alliant member.

An overview of bank overdraft fees

An overdraft occurs when you write a check or make an automated payment for an amount higher than your account balance, causing a negative balance. For example, if your checking account has a balance of $950 and you write a rent check for $1,100, your account will be overdrafted by $150.

Depending on your bank, there are three possible scenarios when an overdraft occurs:

1. Your bank may refuse to complete the transaction due to “non-sufficient funds” (NSF).
2. Your bank may transfer money from a linked savings account to cover the difference.
3. Your bank may process the transaction despite your overdraft, covering the difference for you with the expectation that you’ll pay them back.

Overdraft fees impact millions of Americans. A recent study found that 32% of checking accountholders pay an overdraft fee to their bank at some point. Another study found that between overdraft fees, ATM usage fees and monthly account maintenance fees many banks charge, the average checking consumer paid nearly $1,000 in fees over the last decade.

In fact, during that decade, banks earned more from the fees they charged their customers than they paid out in interest! In 2023 alone, overdraft banking fees cost consumers $5.8 billion.

Alliant and overdraft fees

If you’re an Alliant member, you don’t have to worry about overdraft fees for your Alliant checking and savings accounts!

When implementing this in August of 2021, we kept it simple. Our no-overdraft fee policy applies to all checking and savings accounts, not just those of current members or members who maintain high balances. We don’t have complicated conditions you have to meet to avoid overdraft fees. We eliminated them entirely. All of them. Overdraft fees, such as the ones outlined below, are one thing Alliant members do not have to worry about:

Non-sufficient funds (NSF). (aka, a “bounced” check). Please note that although Alliant no longer charges NSF fees, the vendor or financial institution you were attempting to pay might charge you a fee. For example, if I wrote an Alliant check paying my TJ Maxx store card and that check was refused as an NSF, TJ Maxx might charge me a fee for writing an NSF check to them. But I can rest assured that Alliant won’t charge me.

Overdraft Protection.⁶⁵ When you designate a backup savings account so we can transfer funds to cover your overdrafts.

Standard Courtesy Pay.⁶⁵ With this service, which is standard with all Alliant checking accounts, Alliant covers check, automated transfer and Bill Pay overdrafts for you, and you must deposit the overdraft amount into your account to repay us within 30 days.

Extended Coverage.⁵⁶ This optional protection covers overdrafts made via debit card transactions.

We know that everyone makes mistakes sometimes, whether it’s a math error, an errant check deposit or a miscommunication with an account’s joint owner. Emergencies happen, and we've got our members' backs.

Why Alliant eliminated overdraft fees

At Alliant, we’ve always challenged old-fashioned banking norms, such as depending on high fees, maintaining expensive physical branches and prioritizing stockholder profits at the expense of the customers’ best interests.

We don’t even have stockholders. As a credit union, our member accountholders are our owners, so why would we want to soak our owners by charging a lot of high fees?

How Alliant overdraft fee refunds will work

While we will no longer charge a fee to use the service, we haven’t made any policy or process changes to our overdraft service (Courtesy Pay). Eliminating our overdraft fees is just one of the ways that we put our members first to make banking better.