In a time of sky-high inflation, one despised cost — penalties for overdrawing your bank account — is coming down.
This week, Bank of America and Wells Fargo each announced that they will reduce or eliminate fees when your checking account is overdrawn.
Bank of America says that starting in February, it will eliminate its $35 non-sufficient funds fee.
In addition, beginning in May, the bank’s overdraft fee will fall to $10, down from $35 today. Also in May, Bank of America will end the $12 transfer fee associated with its Balance Connect for overdraft protection service.
Meanwhile, Wells Fargo also has announced that it will end non-sufficient fund fees, and transfer fees for accounts that are enrolled in overdraft protection, by the end of the first quarter.
Sometime around the third quarter, Wells Fargo will give account holders a 24-hour grace period before overdraft fees kick in.
These moves by two of the nation’s largest banks come after smaller banks announced similar initiatives last year.
In June 2021, Ally Bank — the self-described largest online bank in the nation — immediately ended overdraft fees on all accounts.
In December 2021, Capital One announced that it would end overdraft fees and non-sufficient fund fees.
It is likely that other banks soon will follow suit. Commenting on the moves by Bank of America and Wells Fargo, Greg McBride, Bankrate chief financial analyst, told MarketWatch that the moves are coming at a time when regulators and lawmakers have put banks under the microscope:
“This will ratchet the pressure up on other large national and regional banks to take similar steps.”
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