Bank of America overdraft happens when you spend more than your account balance, and the bank covers the difference—then charges you a fee

When you make a purchase, transfer, or withdrawal that exceeds your available balance, Bank of America can pay it anyway. This is called an overdraft. The transaction goes through, your balance goes negative, and Bank of America charges you an overdraft fee—currently $35 per transaction as of this writing. You then owe the bank both the negative balance and the fee.

Bank of America does not require you to set up overdraft protection in advance. Overdrafts happen automatically on debit card purchases, ATM withdrawals, and checks. However, you can link a savings account, money market account, or credit line to cover overdrafts before they trigger a fee—this is the actual "overdraft protection" service, and it costs nothing if it prevents the overdraft from occurring.

The key difference: an overdraft is when the bank covers you and charges a fee. Overdraft protection is when another account of yours covers you with no fee. Many people use the terms interchangeably, but they work differently and cost differently.

Key Takeaways

  • Bank of America charges $35 per overdraft transaction on checking accounts, and the fee applies each time a transaction overdraws your account, not once per day.
  • Overdraft protection links a savings or credit account to your checking account and covers overdrafts with no fee, but you must set this up yourself through Online Banking or a branch.
  • Overdrafts on debit card purchases and ATM withdrawals are automatic, but you can opt out of overdraft coverage for these transactions while keeping it for checks and ACH transfers.
  • Bank of America does not reverse overdraft fees automatically; you must contact them to request a reversal, and they may grant one if you have a clean history or if the overdraft was their error.
  • If your account stays negative for more than 60 days, Bank of America may close it and report you to ChexSystems, making it harder to open accounts elsewhere.

How overdraft fees work at Bank of America

Each transaction that overdraws your account triggers a separate $35 fee. If you make five purchases that each overdraw your account on the same day, you pay five fees—not one. Bank of America processes transactions in a specific order (largest to smallest, not the order you made them), which can cause multiple overdrafts from a single day's spending.

The bank also charges a non-sufficient funds (NSF) fee of $35 if a check or ACH transfer bounces because your account lacks funds. This is separate from an overdraft fee and applies even if you never set up overdraft coverage.

Interest does not accrue on a negative balance the way it does on a credit card. You owe the overdraft amount plus the fee, but no daily interest charges. However, if your account remains negative for an extended period, the bank may close it and refer you to a collections agency.

Setting up overdraft protection to avoid fees

Overdraft protection links a backup account—usually a savings account, money market account, or credit line—to your checking account. When a transaction would overdraw your checking account, the bank transfers money from the linked account instead, and you pay no overdraft fee. You only pay a fee if the backup account also lacks sufficient funds.

To set up overdraft protection, log into Bank of America Online Banking, go to Accounts, select your checking account, and look for "Overdraft Protection" or "Transfer Services." You can link a savings account you own at Bank of America or, in some cases, a credit line. Some customers can also link an external account, though this is less common. Alternatively, visit a Bank of America branch and ask a representative to set it up.

Once active, overdraft protection works automatically. There is no monthly fee for the service itself. You only pay if the transfer fails because your backup account also lacks funds.

Opting out of overdraft coverage for debit and ATM transactions

Bank of America allows you to opt out of overdraft coverage for debit card purchases and ATM withdrawals. If you do, these transactions will be declined rather than overdrawing your account. Checks and ACH transfers (like bill payments) remain covered by overdraft unless you specifically opt out of those separately.

To opt out, log into Online Banking, select your checking account, find "Overdraft Protection" or "Overdraft Settings," and toggle off coverage for debit and ATM. You can also call Bank of America at the number on your card or visit a branch. The change takes effect within one business day.

Opting out prevents overdraft fees on everyday purchases but does not prevent NSF fees on checks or ACH transfers. If you want full protection from overdraft fees, set up overdraft protection with a linked account instead of opting out.

Requesting a reversal of overdraft fees

Bank of America does not automatically reverse overdraft fees, but you can request one. Call the number on your card, explain the situation, and ask whether they will reverse the fee. The bank is more likely to reverse a fee if you have maintained a good account history, if the overdraft was caused by a bank error, or if you have not requested reversals recently.

Be specific: explain what caused the overdraft (a delayed deposit, an unexpected charge, a processing error) and mention how long you have been a customer. If the representative declines, ask to speak with a supervisor. Some supervisors have more authority to reverse fees than frontline representatives.

If you have multiple overdraft fees from the same incident—for example, five fees from one day's transactions—mention that when you call. The bank may reverse all of them or some of them depending on the circumstances.

What happens if your account stays negative

If your checking account balance remains negative for more than 60 days and you do not pay it, Bank of America will close the account. Once closed, the bank reports the negative balance to a collections agency, and the debt may appear on your credit report. The bank may also report you to ChexSystems, a banking history database that other banks check when you try to open a new account.

A ChexSystems report can make it difficult or impossible to open a checking account at most major banks for up to five years. Some banks that specialize in second-chance accounts will still work with you, but they often charge higher fees and offer fewer features.

If you have an overdrawn account at Bank of America, contact them as soon as possible to arrange payment. Even a partial payment shows good faith and may prevent the account from being closed or reported.

Alternatives to overdraft at Bank of America

If overdraft fees are a recurring problem, consider these options: set up overdraft protection with a linked savings account (no fee if it prevents the overdraft), request that the bank lower your overdraft limit or disable overdraft entirely, or switch to a checking account with no overdraft fees. Some online banks and credit unions offer checking accounts that simply decline transactions rather than overdrawing, eliminating the fee risk altogether.

You can also use a credit card for everyday purchases instead of your debit card. Credit cards do not overdraw; they charge interest if you carry a balance, but you have time to pay and can dispute charges if needed. This shifts the risk from overdraft fees to credit card interest, which may be preferable depending on your spending habits.

Bank of America also offers a "Keep the Change" savings program that rounds up debit card purchases to the nearest dollar and transfers the difference to savings. This does not prevent overdrafts, but it can help you build a buffer in a linked savings account, which then protects you via overdraft protection.

Frequently Asked Questions

Can I overdraft my Bank of America savings account?

Bank of America does not allow overdrafts on savings accounts. If you try to withdraw more than your balance, the transaction is declined. However, you can link your savings account to your checking account as overdraft protection, so the savings account covers checking overdrafts without a fee.

How long does it take for an overdraft to clear?

Once you deposit enough money to cover the negative balance and fees, the overdraft clears immediately if you deposit during business hours. If you deposit after hours or on a weekend, the deposit may not post until the next business day, depending on the deposit method.

Will overdraft fees show up on my credit report?

Overdraft fees themselves do not appear on your credit report. However, if your account stays negative for more than 60 days and goes to collections, that collection account will appear on your credit report and damage your score.

Can I get overdraft protection if I have bad credit?

Overdraft protection does not require a credit check. You can set it up as long as you have another Bank of America account with available funds to link. If you do not have a savings account, you can open one and link it immediately.

What is the difference between overdraft and NSF?

An overdraft fee applies when the bank covers a transaction that exceeds your balance. An NSF (non-sufficient funds) fee applies when a check or ACH transfer bounces because you lack funds and overdraft coverage is not available or is disabled. Both cost $35 at Bank of America.