Why is the overall charge on an atom neutral?

The overall charge on a neutral atom is zero.

A neutral atoms contains equal number of electrons and protons.The charge of a proton and electron is equal in magnitude but opposite in sign. A proton has a charge of 1.6 x 10⁻¹⁹C and the charge of an electron is -1.6 x 10⁻¹⁹C. Thus in a neutral atom, the charge of all the protons gets cancelled with the charge of all the electrons.

Thus a neutral atom has a net zero charge.

it is the second option.