The bank fees worth avoiding, and the settings that stop them

The bank fee most worth avoiding is the overdraft fee, and you can switch off the most common version yourself. Under federal Regulation E, a bank cannot charge you to pay an ATM withdrawal or a one-time debit card purchase into overdraft unless you opted in, and you can revoke that opt-in at any time. The CFPB's $5 overdraft rule for very large banks never took effect, because Congress cancelled it in May 2025.

What an overdraft fee costs

A flat fee on a small purchase is huge as a percentage. The CFPB reported in April 2024 that some banks still charge overdraft fees as high as $37 each. The table uses $35 as a round example fee, not the fee at any one bank.

At an assumed 3.50% savings rate, you would need $36,000 on deposit to earn $1,260 in a year. Avoiding the fees can beat chasing yield, which high-yield savings vs a big bank prices out.

How big the business is

In the same report the CFPB found that bank overdraft and non-sufficient funds (NSF) revenue was $5.83 billion in 2023, down from $11.96 billion in 2019, a 51% drop. It estimated that households that overdraw saved about $185 a year from the reduction. Fees are lower than before, but they are still a multi-billion dollar revenue line.

Where the rules stand in October 2026

In December 2024 the CFPB finalized a rule for banks with more than $10 billion in assets. Congress disapproved it before it took effect. Public Law 119-10, approved May 9, 2025, says the rule shall have no force or effect. No federal cap on overdraft fees applies, so each bank sets its own fee.

What still applies is 12 CFR 1005.17, part of Regulation E. It says a bank shall not charge a fee for paying an ATM or one-time debit card transaction under its overdraft service unless it gets your affirmative consent. You may revoke consent at any time, and the bank must act on it as soon as reasonably practicable. The bank must also disclose the maximum number of overdraft fees it may charge per day, or that there is no limit.

The setting to change

Find overdraft coverage in your bank's app or branch and turn it off for ATM and debit card transactions. After that, a debit purchase that would overdraw your account is declined instead of paid with a fee.

The fees to check, and what stops them

The two fees in the first rows are both triggered by the same event, a balance too low for a payment. The difference is what the bank does. Overdraft means it pays and charges you. NSF means it refuses and charges you.

Asking for a refund

1. Call the bank rather than sending a message.
2. Name the fee and the date and ask for a reversal.
3. Mention a clean history if you have one.
4. Ask what setting would stop it happening again.

Banks have discretion here, so a request costs nothing. It is not a right, and a no is a no. If you keep paying the same fee, change the setting or the account.

If you switch banks

1. Open the new account before closing the old one.
2. Move direct deposit and confirm the first deposit arrives.
3. Move automatic payments one at a time.
4. Leave the old account open with a small balance for a couple of statement cycles.
5. Close it in writing and keep the confirmation.

The overlap prevents a missed autopay, which can cost more than the fee you left to avoid. Pair this with a cash buffer: see how much emergency fund you need.

Frequently asked questions

Sources

1. Data spotlight: Overdraft/NSF revenue in 2023 down more than 50% versus pre-pandemic levels, Consumer Financial Protection Bureau, April 2024. Checked October 2026.
2. 12 CFR 1005.17, Requirements for overdraft services (Regulation E), Legal Information Institute, Cornell Law School. Checked October 2026.
3. Public Law 119-10, disapproving the CFPB rule on Overdraft Lending: Very Large Financial Institutions, U.S. Congress. Checked October 2026.