Bank of America lets you overdraft, but only if you opt in, and the bank charges a fee each time you go negative

Bank of America does not automatically overdraft your checking account. You have to turn on overdraft protection yourself, either through a linked savings account, a line of credit, or by asking the bank to cover transactions that would otherwise bounce. If you do not opt in, transactions will simply decline at the point of sale or ATM. Once overdraft is on, the bank will cover the shortfall—but you pay a fee for each overdraft, usually $35 per transaction as of 2024, though this amount can change.

The key difference is between overdraft protection (which you choose) and overdraft fees (which you pay when protection kicks in). Bank of America offers multiple ways to set up protection, and which one you pick affects how much you pay and how quickly you have to repay.

Key Takeaways

  • Overdraft protection is opt-in at Bank of America; your account will not overdraft unless you turn it on in your account settings or at a branch.
  • Each overdraft transaction typically costs $35, and the bank can charge multiple fees in a single day if you overdraft more than once.
  • Linking a savings account is the cheapest option because there is no fee if the transfer succeeds, though some banks charge a small transfer fee.
  • Bank of America's overdraft line of credit charges interest on the amount borrowed, making it more expensive than a savings account transfer over time.
  • If you frequently overdraft, the fees add up fast; tracking your balance or setting up low-balance alerts can prevent most overdrafts before they happen.

Three ways to set up overdraft protection at Bank of America

Bank of America offers three routes to overdraft protection. The first is overdraft protection via a linked savings account. If you have a Bank of America savings account, you can link it to your checking account so that when you overdraft, the bank automatically transfers money from savings to cover the shortfall. There is no fee if the transfer goes through, though you lose the interest you would have earned on that money in savings.

The second is overdraft line of credit. This is a short-term loan from Bank of America that covers overdrafts. The bank charges interest on the amount you borrow, typically at a higher rate than a personal loan. You repay it on a schedule, and interest accrues daily until the balance is zero. This is more expensive than a savings account transfer if you carry the balance for more than a few days.

The third is standard overdraft coverage, sometimes called overdraft privilege. You do not link another account or take out a line of credit; instead, you simply ask Bank of America to cover overdrafts as they occur. Each covered transaction costs $35. This is the most expensive option if you overdraft regularly, because the fee applies to every single transaction that goes negative, even if it is only by a dollar.

How overdraft fees work and when they are charged

When you overdraft with standard overdraft coverage, Bank of America charges $35 per transaction. The fee is not charged once per day—it is charged once per overdraft transaction. If you make five transactions that overdraft your account on the same day, you could be charged $175 in fees, though Bank of America does cap the total overdraft fees you can be charged in a single day (the cap varies, so check your account terms).

The fee is usually deducted from your account within one to two business days of the overdraft. This can create a spiral: you overdraft by $10, get charged $35, and now you are $45 in the hole. If you then make another transaction before you deposit money, you overdraft again and get charged another $35. Many people end up paying hundreds of dollars in fees from a single small mistake.

Bank of America also charges an extended overdraft fee if your account stays negative for more than a certain number of days (usually five business days). This is a second fee on top of the per-transaction fee, so it is important to bring your account back to zero quickly.

Linking a savings account is usually the cheapest option

If you have a Bank of America savings account, linking it to your checking account for overdraft protection is almost always cheaper than paying per-transaction fees. There is no fee when the transfer happens, so you only lose the interest you would have earned on the transferred money—usually a few cents to a few dollars depending on how much you transfer and how long it sits in checking.

To set this up, log into your Bank of America account online or call 1-800-432-1000 and ask to link overdraft protection. You will need to provide the account number of the savings account you want to link. Once it is set up, any overdraft will automatically pull from savings. You can also set a limit on how much the bank will transfer in a single day, which prevents you from accidentally draining your savings.

The downside is that you need to have money in savings to begin with. If your savings account is empty, this option does not help. In that case, you would need to choose between the overdraft line of credit or standard overdraft coverage.

Overdraft line of credit: interest charges and repayment

Bank of America's overdraft line of credit works like a small personal loan. When you overdraft, the bank lends you the money at an interest rate that is higher than most personal loans—often in the range of 17% to 21% annual percentage rate (APR), though the exact rate depends on your credit and the current market. Interest accrues daily on the borrowed amount.

If you borrow $500 and repay it within a week, you might pay $10 to $15 in interest. If you carry the balance for a month, you could pay $50 or more. This makes the line of credit more expensive than a savings account transfer for anything longer than a few days, but cheaper than paying $35 per transaction if you overdraft multiple times in a month.

Repayment is usually automatic: Bank of America deducts a set amount from your checking account each month until the balance is zero. You can also pay it off early without penalty. The key is to check your account regularly so you know you are carrying a balance and can pay it down quickly.

What happens if you do not opt in to overdraft protection

If you do not turn on any form of overdraft protection, transactions that would take your account negative will simply be declined. You will not be charged an overdraft fee, but the transaction will fail—your debit card will be rejected at the store, your check will bounce, or your bill payment will not go through.

A bounced check or failed bill payment can have its own costs. Your landlord or creditor might charge a late fee, or a merchant might charge a returned-check fee (usually $25 to $35). Your credit score can also take a hit if a bill payment fails and you miss the due date. So while declining transactions avoids overdraft fees, it can create other problems.

Many people choose to turn on overdraft protection precisely because the alternative—having transactions declined—is worse. The trick is to monitor your balance so you rarely need to use it.

How to turn off overdraft protection or change your settings

You can turn off overdraft protection at any time through your Bank of America account online, through the mobile app, or by calling 1-800-432-1000. Log into your account, go to Settings, and look for Overdraft Protection or Overdraft Coverage. You can turn off standard overdraft coverage, remove a linked savings account, or close an overdraft line of credit from the same menu.

If you have a linked savings account and want to keep it but remove standard overdraft coverage, you can do that too. This way, only the savings account will cover overdrafts, and you will not be charged a per-transaction fee. You can also set a daily transfer limit so the bank does not move more than a certain amount from savings in a single day.

Changes usually take effect immediately, though it can take up to one business day for some settings to update. If you are trying to avoid overdraft fees, turning off standard overdraft coverage and relying only on a linked savings account is a good middle ground.

Preventing overdrafts before they happen

The cheapest overdraft fee is the one you never pay. Bank of America offers a low balance alert that sends you a text or email when your checking account drops below a threshold you set. You can set it at $100, $50, or any amount that makes sense for your spending. When you get the alert, you can transfer money from savings, deposit a check, or simply stop spending until your next paycheck.

You can also set up automatic transfers from savings to checking on a regular schedule—for example, every Friday or on the first of the month. This keeps a buffer in your checking account so you are less likely to overdraft by accident. Some people transfer $50 or $100 every week just to have a cushion.

Checking your balance before large purchases or bill payments takes only a few seconds and prevents most overdrafts. Bank of America's mobile app shows your balance in real time, so you can check it anywhere. If you know you are close to zero, wait until your next deposit before making a big purchase.

Frequently Asked Questions

Can Bank of America overdraft my account without my permission?

No. Overdraft protection is opt-in, meaning you have to turn it on yourself. If you have not set up any form of overdraft protection, transactions will be declined rather than overdrafted. However, if you previously turned on overdraft coverage and forgot about it, the bank will still charge fees.

What is the maximum overdraft amount Bank of America will allow?

Bank of America does not publish a single maximum overdraft amount; it depends on your account history, credit, and the type of protection you have set up. A linked savings account can transfer up to the balance in that account. An overdraft line of credit typically ranges from $500 to $2,500, but the bank decides based on your profile.

How long do I have to repay an overdraft?

If you use a linked savings account, the transfer is immediate and you repay by depositing money back into savings when you can. If you use an overdraft line of credit, Bank of America sets a repayment schedule, usually monthly. Standard overdraft coverage (the $35 fee) does not require repayment—you just pay the fee and move on, though you still need to bring your account back to zero.

Will overdraft fees hurt my credit score?

Overdraft fees themselves do not show up on your credit report. However, if an overdraft causes you to miss a bill payment or if the bank sends your account to collections, that can damage your credit. Staying on top of your balance prevents both the fees and the credit damage.

Can I get overdraft fees refunded if I call the bank?

Bank of America may refund one or two overdraft fees if you call and ask, especially if you have a good account history and this is your first time asking. There is no may provide, and the bank is not required to refund fees. If you are charged multiple fees in a short time, it is worth calling 1-800-432-1000 to ask, but do not count on it.