CAPITAL One is the latest bank to waive overdraft fees.
It became the largest banking institution to eliminate fees after Allied Bank did so earlier this year.
The bank said it was eliminating the fees in a move to restore “ingenuity, simplicity and humanity to banking,” according to a statement. declare from Capital One Founder and CEO Richard Fairbank.
As of 2022, overdraft fees and insufficient funds (NSF) fees will disappear, although the bank’s overdraft protection will remain waived.
“Bank accounts are fundamental to one’s financial life,” says Fairbank.
“Overdraft protection is a valuable and convenient feature and can be an important safety net for families.
“We’re delighted to offer this service for free.”
The move comes despite Capital One reportedly making $150 million in annual revenue from fees, according to CNBC.
Why do banks charge fees and how can I avoid them?
Overdraft fees are usually incurred when the account balance drops below zero.
They usually cost up to $25 per transaction.
Capital One’s overdraft fee is now $35, according to the bank website.
So if you withdraw money from your account multiple times in a week, or do so with multiple accounts in a day, you could waste hundreds of months in fees.
According to a FinHealth report, Americans paid more than $12 billion in overdraft fees last year.
Fees are often seen as a mining device.
Research by the Consumer Financial Protection Bureau suggestions that banks reap a lot of profit from annual overdraft and insufficient funds (NSF) fees, with a total 2019 profit of about $15.47 billion.
To protect yourself from fees, there are several steps you can take.
First, pay attention to your budget and don’t overspend.
Using a banking app to track your balance on a daily basis can also be helpful to keep track of when you’re nearing overdraft territory.
If you use one bank for multiple accounts, like checking and savings, linking them can ensure that funds from one account are transferred to another to avoid overdraft fees.
We explain why Bank overdraft fees soar during the pandemic.
We also explain how many bank accounts will you need for 2022.
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https://www.the-sun.com/money/4191118/major-us-bank-axe-overdraft-fees-save-cash/ Another major US bank reduces overdraft fees