TD Bank is doing away with overdraft fees with low-cost, no-overdraft-fee deposit accounts, launching in August.
The accounts, dubbed TD Essential Banking, were announced June 24 in an effort to align with TD’s bank-wide efforts to meet the needs of unbanked or underbanked customers, an announcement from the Cherry Hill-based financial institution said.
Once launched, TD Essential Banking will be certified as meeting the Bank On National Account Standards.
“At TD, we foster a culture of care and inclusion among our colleagues and within our communities, and that extends to the products and services we offer our customers,” said Head of Consumer Deposits, Products and Payments Alissa Van Volkom in a prepared statement. “TD’s goal for this new account offering is to help our customers establish a more secure, inclusive and sustainable financial future for themselves, their families, and their communities.”
TD Essential Banking is a checkless deposit account designed to meet the needs of customers in more communities by providing additional account options. There is no minimum daily balance requirement and customers can’t overdraw their account.
The overdraft policy change isn’t just going to affect TD Essential Banking customers: The bank is making changes to its overdraft policy across all deposit accounts come August.
The bank’s current overdraft policy docks a customer $35 per overdraft up to 5 times per day. Last summer, TD agreed to pay $97 million in restitution to more than 1.4 million customers, along with a $25 million civil penalty to settle allegations brought by the Consumer Financial Protection Bureau that it engaged in illegal overdraft fee practices.
A recent TD Bank survey found that 37% of unbanked customers cite fee avoidance and lack of funds as the top reasons discouraging them from opening a bank account.
In addition to the introduction of TD Essential Banking and the change in its overdraft fees, TD also made changes across its consumer lending portfolio, including a reduced secured card minimum requirement, a fully online-accessible secured card offering, a reduced minimum for home equity loans, and enhancements to Right Step, TD’s LMI mortgage product.
“We’re pleased with the changes being made across the full consumer product line-up,” said Matt Boss, head of consumer products at TD Bank, in a prepared statement. “These updates provide more customers with important access to mainstream lending and deposit offerings. There’s more to do in this space and we look forward to sustaining this effort to support all customers and communities with valuable products and services.”