What Younger Account Holders Expect When Funds Run Short

According to J.D. Power’s 2026 Millennial and Gen Z Checking Satisfaction Study, younger account holders reward checking providers that keep balances accurate, communicate before problems arise and help them avoid unexpected fees and declined transactions.

For institutions that offer overdraft services, the findings are a timely prompt to look at how well current practices support those expectations. The question goes beyond whether overdraft coverage is available to how clearly the service is explained, when account holders hear about it and what options they have when funds run short.

What the research found

J.D. Power surveyed more than 23,000 U.S. adults in June and July 2026. Millennials and Gen Z now account for two out of every three new primary checking accounts, so their expectations increasingly shape what every account holder experiences.

Three findings stand out for overdraft programs.

Balances people can trust. Younger account holders expect timely, accurate balance information. When the balance displayed in an app doesn’t account for pending transactions, account holders may make decisions based on incomplete information.

Younger account holders want to avoid the unexpected. The research suggests that account value involves more than simply avoiding fees. Seven of the 10 highest-scoring accounts in the study were premium, relationship or rewards accounts, five of them with benefits tied to the account balance. What they want to avoid is the unexpected. The providers that scored highest earned strong marks for fee fairness and for helping account holders avoid overdrafts, declined transactions and fees they didn’t see coming. Clear information about when fees may apply and how overdraft services work can help account holders better understand their options and avoid unexpected outcomes. That puts transparency and program understanding at the center.

Communication that arrives in time. Proactive communication was one of the study’s main drivers of satisfaction. Yet only 38% of respondents always read their institution’s emails about their checking account, and satisfaction among those who did was 90 points higher, on a 1,000-point scale, than among those who read them sometimes or never.

Why this supports a responsibly managed program

Some online providers limit or eliminate overdraft services to help consumers avoid fees. While this approach may meet the needs of many account holders, it doesn’t eliminate every challenge associated with insufficient funds. Depending on the transaction, a payment may be declined or returned, potentially resulting in a late fee or other consequences outside the financial institution. For example, a returned rent payment could result in a late charge, while an unpaid insurance premium could put coverage at risk.

J.D. Power listed declined transactions right beside overdrafts and unexpected fees as things younger account holders want help avoiding. A well-run overdraft service, explained clearly and supported by timely communication, speaks to that need directly. When available under the program’s terms, overdraft coverage can help account holders manage an essential payment when funds run short, provided they understand their options and potential costs.

The study’s top-ranked traditional bank illustrates the point. J.D. Power’s Paul McAdam credited a combination of flexible features and strong alerts for helping account holders “avoid surprises.” The specific features will look different at every institution. The principle behind them (transparency, timely information and fair treatment) is the same one behind the programs ADVANTAGE clients already run. Reasonable fee amounts, de minimis thresholds, daily fee caps and clear account holder communications are part of ADVANTAGE’s program recommendations and are put in place when a program is installed.

These findings reinforce the importance of transparent, consistently managed overdraft services and offer a useful perspective for ongoing program review.

Five areas worth revisiting

As consumer expectations evolve, it’s worth confirming that your overdraft program continues to meet account holder needs and operate as intended. The J.D. Power findings point to five areas to keep in view as part of ongoing program management.

A review doesn’t necessarily mean changes are needed. It may simply confirm that existing practices continue to serve your institution and account holders well.

Let’s talk it through

Your ADVANTAGE Relationship Manager can help review these areas, share relevant industry observations and discuss whether anything warrants a closer look. If it has been a while since your last program review, this may be a good opportunity to reconnect.

About the Author

Jimmy Nguyen

VP, Client Services for Overdraft Privilege
ADVANTAGE

With more than 20 years of financial services experience, Jimmy helps client institutions strengthen overdraft program management through strategic guidance, ongoing oversight, and practical recommendations. He leads ADVANTAGE’s Relationship Management and Client Success teams.

About ADVANTAGE

ADVANTAGE partners with community banks and credit unions to drive sustainable growth and operational efficiency. With more than four decades of industry experience, ADVANTAGE delivers data-driven solutions that help financial institutions expand market share, strengthen non-interest income, and improve technology utilization.