Banks take in significant revenue by charging overdraft fees, and Chase Bank is no exception. An overdraft occurs when a transaction is presented to your checking account for payment and you don’t have enough money in there to cover it, but the bank pays it anyway.
How Chase Handles Overdrafts
Transactions in and out of your bank account occur overnight in a process Chase refers to as “posting order." Your deposits for the day are added first. Then checks, debit card transactions, internet transactions, cash withdrawals and ATM withdrawals are subtracted – basically every debiting transaction you’ve authorized for that day. The largest transactions are processed first. Bank fees are subtracted last.
Chase says, “We do authorize and pay overdrafts” for checks and other transactions using your checking account number when one or more are presented for payment but your account balance isn’t sufficient to cover then. But this isn’t the same as saying that the bank will definitively pay them. It’s more like saying they might. The bank stresses that covering overdrafts happens at its "discretion," and it depends on your account history and the amount of the transaction.
Chase won’t pay everyday debit card transactions that will overdraw your account unless you’ve requested this service, and honoring debit card transactions that will overdraw you also happens at the bank’s discretion.
The Chase Secure Account
Federal regulators have long leaned on banks to accommodate low-income consumers, and Chase Bank has complied by offering a special account for those who haven’t been able to maintain checking accounts in the past because of the costs associated with them. The "Chase Secure Account" isn’t subject to overdraft charges
Consumers can qualify for a Chase Secure Account if they have a current ID and no history of fraud. You can’t sign up for overdraft protection with this account because there are no overdraft fees. Debits and checks that will overdraw your account simply won’t be honored and paid. The monthly fee for maintaining this account is just $4.95 a month.
Chase Bank’s Standard Overdraft Protection
Chase Bank’s standard overdraft protection allows you to link your checking account to your savings account to cover any potential overdrafts. This is a common service provided by banks, and it's available for all accounts except the Chase Secure or Chase High School Checking options.
You have to opt in for this overdraft protection, and you’ll be out of luck if you don’t have sufficient money in savings to accommodate the transfer. There’s no transfer fee, but Chase indicates somewhat vaguely that “other fees may apply.”
Chase will also text you, email you or send you a push notification to warn you when your checking account balance falls below a certain threshold. That threshold is up to you. You tell Chase when you want them to wave a red flag.
Chase Bank Overdraft Fees
Unlike some other banks, Chase calls its overdraft fees “nonsufficient funds fees when it pays and honors a transaction. It’s a “returned item fee" if the transaction is declined because there are not available funds and not paid.
Both fees are $34. The nonsufficient funds fee is waived if you have overdrawn your account by $5 or less, and Chase will only charge you three such fees in any given day for a total of $102 no matter how many transactions bounce.
Even better, Chase will only charge you once if the same check or transaction is presented multiple times for payment, which often happens when the bank declines to cover a check or payment. The merchant or payee can and usually will try to present the check for payment again. Chase won’t charge you $34 for the second or subsequent times.
On the downside, you’ll pay $5 for each transfer from savings to checking if you opt in for overdraft protection, but only if all your transfers exceed six per month.
Preventing an Overdraft
Unlike some banking institutions, Chase cites specific cutoff times beyond which a deposit you make to avoid an overdraft won’t count toward that day’s posting order.
You can make a deposit at any branch location while it’s still open and the deposit will count among that day's transactions. Otherwise, you can deposit money up to until 11 p.m. at an ATM on the East coast, or until 8 p.m. on the West coast. The same 11 p.m. and 8 p.m. cutoff times apply to online transfers and those made on the bank’s mobile app, but only between Chase accounts. Transfers made from other banks don’t fall within these guidelines.
Read More: How to Deposit Cash in an ATM
Chase Bank has also indicated that its customer service representatives stand by to possibly waive fees during the coronavirus pandemic. Don’t hesitate to reach out if you find yourself in financial trouble during a difficult time.
- Bankrate: JPMorgan Chase Rolls Out Checking for Low-Income Customers With No Overdraft Fees
- Chase: Overdraft and Overdraft Fee Information for Your Chase Checking Account
- Chase: Make the Choice That’s Right for You
- Chase: Standard Overdraft Practice
- Chase: FAQs
- Chase: Overdraft Protection
- Chase: Debit Card Coverage
- Chase: How Transactions Post
- U.S. News & World Report: These Banks Are Waiving Overdraft Fees Because of the Coronavirus
- Chase Bank. "About Chase Bank." Accessed Feb. 27, 2020.
- Chase Bank. "Savings Account." Accessed Feb. 27, 2020.
- Chase Bank. "Chase Certificates of Deposit Interest Rates." Accessed March 19, 2020.
- J.D. Power. "2019 U.S. National Banking Satisfaction Study." Accessed Feb. 27, 2020.
Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.