Bank of America allows overdrafts on checking accounts, but you pay a fee each time and the bank decides whether to cover the transaction

Bank of America does not automatically prevent transactions that would take your account below zero. Instead, the bank can choose to process the transaction anyway and charge you an overdraft fee—currently $35 per transaction as of this writing. You are not required to use overdraft protection, and you can turn it off. If you do not have overdraft protection enabled and attempt a transaction that exceeds your balance, the bank will typically decline it at the point of sale or ATM, and you will not be charged a fee for the declined transaction itself.

The key distinction is between overdraft protection (which you can opt into) and overdraft fees (which you pay when the bank covers a negative balance). Bank of America's overdraft protection links your checking account to a savings account, money market account, or line of credit so that funds transfer automatically if you overdraw. Without this protection enabled, the bank may still cover small overdrafts at its discretion, but you will pay the fee.

Key Takeaways

  • Bank of America charges $35 per overdraft transaction if the bank covers it, regardless of how far below zero your account goes.
  • You can turn off overdraft protection entirely, which means transactions will decline rather than overdraw, and you will not pay overdraft fees.
  • Overdraft protection transfers funds automatically from a linked savings or money market account, but you must set this up in advance through your online banking or by visiting a branch.
  • The bank can cover overdrafts even without protection enabled, but this is discretionary and you will still pay the $35 fee.
  • Multiple overdrafts in a short period can result in multiple $35 fees, so a single mistake can cost $70, $105, or more depending on how many transactions post.

How overdraft fees work at Bank of America

When you make a transaction that would bring your account below zero, Bank of America assesses whether to cover it. If the bank approves the transaction, it posts to your account and you immediately owe the overdraft fee. The fee is charged per transaction, not per day—so if you make three purchases that overdraw your account on the same day, you will be charged three separate $35 fees, totaling $105.

The bank does not charge interest on the overdrawn amount itself the way a credit card does. The $35 fee is the only charge. However, if your account remains negative for several days, the bank may close your account or refer you to a collection agency, which creates separate problems beyond the overdraft fee.

Bank of America also has a practice called reordering transactions. The bank may process larger transactions before smaller ones, even if they occurred in a different order. This can cause more transactions to overdraw than would have if they had posted in the order you made them. You cannot prevent this reordering, but you can avoid overdrafts altogether by monitoring your balance before spending.

Turning off overdraft protection or opting out entirely

You can disable overdraft protection through your Bank of America online banking account or by calling 1-800-432-1000. Once disabled, transactions that would overdraw your account will be declined at the point of sale, ATM, or online checkout. You will not be charged a fee for a declined transaction.

Opting out of overdraft coverage means the bank will not cover overdrafts on debit card purchases, ATM withdrawals, or checks. However, some transactions—such as automatic bill payments or ACH transfers—may still overdraw your account even after you opt out, because the bank processes these differently. If you want to prevent all overdrafts, you must also monitor your balance closely and ensure automatic payments do not exceed your available funds.

If you have already been charged overdraft fees and believe they were unfair or the result of a bank error, you can contact Bank of America to request a reversal. The bank may reverse one or two fees as a courtesy, especially if you have a good account history, but this is not may provide and depends on the circumstances.

Setting up overdraft protection with a linked account

Overdraft protection transfers funds automatically from another account you own at Bank of America—typically a savings account, money market account, or line of credit—to cover overdrafts on your checking account. This prevents the overdraft fee from being charged because the account never actually goes negative.

To set up overdraft protection, log into your Bank of America online banking account, go to the settings for your checking account, and select the option to link a backup account. You can choose which account to link and set a minimum balance threshold if you want. Once enabled, any overdraft will trigger an automatic transfer from the linked account instead of an overdraft fee.

The downside is that you must have sufficient funds in the linked account. If both accounts are low on funds, the transfer will fail and you will be charged the overdraft fee anyway. Additionally, if you link a savings account, the transfer counts as a withdrawal, and federal regulations limit you to six withdrawals per month from a savings account (though this rule has been relaxed in recent years). Linking a money market account or line of credit avoids this limit.

What happens if you repeatedly overdraft

Bank of America monitors overdraft patterns. If you overdraft your account multiple times within a short period, the bank may close your account without warning. A closed account appears on your banking history and can make it harder to open accounts at other banks. Some banks use ChexSystems, a banking history database, to screen applicants, and repeated overdrafts show up there.

If your account is closed due to overdrafts, you will still owe any outstanding overdraft fees and any negative balance. The bank will attempt to collect this amount, and if unsuccessful, may send your account to a collection agency. This can damage your credit score and result in wage garnishment or bank levies in extreme cases.

If you find yourself overdrafting regularly, the underlying issue is usually that your income does not cover your expenses. Overdraft protection or opting out of overdrafts does not solve this problem—it only changes whether you pay a fee or have transactions declined. Consider creating a budget, cutting expenses, or seeking additional income before relying on overdraft as a financial strategy.

Overdraft fees compared to other consequences of overspending

A $35 overdraft fee is expensive relative to the amount overdrawn. If you overdraft by $5 and the bank covers it, you have paid a 700% fee on that $5. Over time, overdraft fees add up quickly. Someone who overdrafts twice a month pays $840 per year in fees alone.

By contrast, a declined transaction costs nothing but may be inconvenient—your card will not work at checkout, or a check will bounce. A bounced check also triggers a fee from the merchant or your bank, typically $25 to $35, so the cost is similar. However, a declined transaction does not damage your banking history the way repeated overdrafts do.

If you have access to a credit card with a low interest rate, borrowing on the card for a short-term shortfall is often cheaper than paying overdraft fees. A credit card at 20% APR costs about 0.05% per day, so borrowing $100 for one week costs roughly $0.35 in interest—far less than a $35 overdraft fee. Of course, credit card debt can spiral if you do not pay it off quickly, so this is only a better option if you can repay within days or weeks.

How to avoid overdrafts in the first place

The most reliable way to avoid overdrafts is to keep a buffer in your checking account—money you do not spend and treat as a minimum balance. Many people keep $200 to $500 as a cushion. This prevents accidental overdrafts when transactions post in an unexpected order or when you miscalculate your balance.

Enable balance alerts through your Bank of America online banking or mobile app. You can set alerts to notify you when your balance falls below a certain amount—for example, $100. This gives you time to transfer funds or delay a purchase before you overdraft.

Reconcile your checking account regularly by comparing your bank statement to your own records. This catches errors early and helps you understand when transactions post relative to when you make them. Many people are surprised to learn that a check they wrote weeks ago has not cleared yet, or that a debit card transaction took several days to post.

If you receive income on an irregular schedule, calculate your average monthly income and budget based on that rather than your best month. This prevents you from spending money you do not actually have when income is lower in a given month.

Frequently Asked Questions

Can Bank of America refuse to cover an overdraft?

Yes. The bank has no obligation to cover overdrafts and can decline any transaction that would take your account negative. This is why opting out of overdraft coverage is possible—the bank will simply decline the transaction instead. Even with overdraft protection enabled, if the linked account has insufficient funds, the transfer will fail and the overdraft fee will be charged.

How long do I have to pay back an overdraft?

You must pay back the overdrawn amount immediately—the bank does not give you a grace period. If your account remains negative for more than a few days, the bank may close your account or refer it to collections. The overdraft fee is charged separately and is non-refundable unless the bank reverses it as a courtesy.

Will an overdraft show up on my credit report?

A single overdraft does not automatically appear on your credit report. However, if the overdraft goes unpaid and is sent to a collection agency, it will appear as a collection account and damage your credit score. Additionally, if you overdraft repeatedly, the bank may report you to ChexSystems, which other banks use to screen applicants.

Can I get an overdraft fee reversed?

Bank of America may reverse one or two overdraft fees if you contact them and explain the situation, especially if you have a good account history and this is your first time asking. However, the bank is not required to reverse fees, and repeated requests are unlikely to succeed. Your best option is to call 1-800-432-1000 and ask politely, but do not expect a may provide.

What is the difference between overdraft protection and overdraft coverage?

Overdraft protection is a service you set up in advance that links your checking account to another account and transfers funds automatically. Overdraft coverage is the bank's discretionary decision to cover an overdraft even without protection enabled. With protection, you avoid the fee; with coverage, you pay the $35 fee but the transaction goes through.