Overdraft fees can take a hit on your pockets over time.
Fortunately with Ally Bank, you no longer have to worry about them. The largest digital bank in the U.S. announced last week that they have eliminated overdraft fees on all accounts starting this month. The best news of all: every Ally Bank customer is eligible, and there are no requirements or restrictions.
This major move comes a few months after the financial services company waived overdraft fees as part of its Covid-relief package for their most financially vulnerable customers which was a much-needed reprieve.
The announcement was also delivered only a few weeks after lawmakers called out bank CEOs on Capitol Hill for unfair overdraft fees amid the pandemic and subsequent economic downturn.
Ally said it’s doing away with on all accounts to help keep people from getting into more debt.
“We know that money can be a source of stress and confusion,” said Diane Morais, president of consumer and commercial banking at Ally Bank, in a press release. “Overdraft fees can be a major cause of anxiety. It became clear to us that the best way to relieve that anxiety was to eliminate those fees.”
Ninety-five percent of the consumers who paid $12.4 billion in overdraft fees in 2020 were “financially vulnerable” and disproportionately Black and Latinx, according to the 2021 FinHealth Spend Report. Among those financially vulnerable households with checking accounts, 43% averaged 9.6 overdrafts during 2020, resulting in annual overdraft fees of hundreds of dollars per household on average.
“Nationwide, more than 80% of overdraft fees are paid by consumers living paycheck to paycheck or with consistently low balances – precisely the people who need help stabilizing their finances. Eliminating these fees helps keep people from falling further behind and feeling penalized as they catch up,” Ally Financial’s CEO and President Jeffery Brown said in a release.
Overdraft fees are particularly stressful for those living on fixed incomes or paycheck to paycheck. With most banks charging overdraft fees between $15-$35 per transaction, those costs can be devastating to consumers’ financial wellbeing.
“We know that money can be a source of stress and confusion, and we try to simplify that for people. Overdraft fees can be a major cause of anxiety. It became clear to us that the best way to relieve that anxiety was to eliminate those fees.”
Ally has never charged overdraft fees for debit card transactions or charged more than one overdraft fee per day. For over a decade, Ally has been leveraging its direct bank model to pass a value back to customers with no minimum balance requirements, no monthly maintenance fees, no ACH transfer fee, and a large nationwide, no-fee ATM network with over 43,000 Allpoint ATMs.