Yes, you can overdraft with Bank of America, but the bank charges a fee and you have to opt in

Bank of America allows overdrafts on checking accounts, but only if you turn on overdraft protection or overdraft coverage. Without it, the bank will decline transactions that would take your account below zero. If you do have overdraft protection enabled, the bank will cover the shortfall — but you pay a fee for each overdraft, and interest accrues on the negative balance until you repay it.

The overdraft itself is not automatic. You have to choose it. Bank of America offers two main ways to cover overdrafts: linking a savings account or money market account to your checking account, or allowing the bank to cover the overdraft and charge you a fee. Most people end up paying the fee because they either don't set up the account link or don't have enough in savings to cover the gap.

Key Takeaways

  • Bank of America charges an overdraft fee each time your checking account goes negative, unless you link a savings account to cover the shortfall automatically.
  • You must opt into overdraft protection; the bank will not cover overdrafts by default, and transactions will be declined if you don't have the funds.
  • The overdraft fee applies per transaction, so multiple small purchases on the same day can trigger multiple fees.
  • Interest on the negative balance starts accruing immediately, and you owe the full amount plus interest until your account is positive again.

The two ways Bank of America covers overdrafts

The first method is overdraft protection through a linked account. You connect a Bank of America savings account, money market account, or line of credit to your checking account. When a transaction would overdraw your checking account, the bank automatically transfers money from the linked account to cover it. There is no fee for this transfer, but you lose the money from your savings, and you need to have enough in that account when the overdraft happens.

The second method is overdraft coverage, which means the bank covers the overdraft itself and charges you a fee. Bank of America's overdraft fee is $35 per transaction as of the most recent update, though this can change. The fee applies each time a transaction overdraws your account, so if you make five purchases that each overdraw you by $1, you pay five $35 fees — a total of $175 on a $5 shortfall. Interest also accrues on the negative balance at the account's current rate.

You can have both methods active at the same time. If you do, the bank will try to transfer from your linked account first. If that account doesn't have enough money, the overdraft coverage kicks in and you pay the fee.

How to turn overdraft protection on or off

You can manage overdraft settings through the Bank of America mobile app, online banking, or by calling customer service at the number on the back of your debit card. In the app or online, look for account settings or preferences, then search for "overdraft" or "overdraft protection." You can turn overdraft coverage on or off, and you can add or remove linked accounts for automatic transfers.

If you have never set up overdraft protection, the default is that overdraft coverage is off — meaning transactions will be declined if you don't have the funds. Turning it on requires you to actively choose it. Some accounts come with overdraft coverage already enabled, so check your settings even if you don't remember signing up for it.

Changing your settings takes effect immediately in most cases, though it can take up to one business day for some changes to show up in the system. If you turn off overdraft coverage, future transactions will be declined instead of overdrawn, but any existing negative balance still has to be repaid with interest.

What happens when your account goes negative

The moment your account balance drops below zero, you owe Bank of America money. If overdraft coverage is on, the bank covers the transaction and charges you the $35 fee. The negative balance now accrues interest at the rate set for your account type — this varies, but overdraft interest rates are typically much higher than regular savings rates.

You have to repay the full negative amount plus interest. The bank does not automatically take money from your next paycheck or any incoming deposit — you have to manually transfer money in or make a deposit. However, if you have overdraft protection linked to a savings account, the bank will automatically transfer from that account to bring your checking account back to zero, which depletes your savings instead.

If your account stays negative for a long time, the interest compounds and the debt grows. Bank of America may also close your account if the negative balance is not resolved within a certain period, and they may report the debt to a collection agency. A closed account and collection report will damage your credit score and make it harder to open accounts at other banks.

Overdraft fees can stack up quickly

One of the most expensive aspects of overdrafting is that the fee applies per transaction, not per day. If you swipe your debit card five times on the same day and each transaction overdraws your account, you pay five $35 fees — $175 total — even though you were only short $10 or $20 for a few hours.

Bank of America does have an overdraft fee limit: you pay a maximum of four overdraft fees per day. This means the most you can be charged in a single day is $140 (four fees × $35). However, this limit applies only to overdraft fees, not to interest charges, which continue to accrue on the negative balance.

The best way to avoid stacking fees is to turn off overdraft coverage and let transactions be declined instead. This way, you know immediately that you don't have the funds, and you can stop spending. The alternative is to keep a buffer in your account — money you never spend — so your actual balance is always higher than what you think you have available.

How overdraft differs from a line of credit or overdraft line

Some Bank of America accounts come with an overdraft line, which is different from overdraft coverage. An overdraft line is a small credit line attached to your checking account. If you overdraw, the bank lends you the money at an interest rate, similar to a credit card. You then pay back the borrowed amount plus interest over time.

This is not the same as overdraft coverage, where the bank covers the overdraft and charges a flat fee. With an overdraft line, you pay interest on the borrowed amount, and the interest rate can be higher than a credit card rate. You have to pay back the borrowed amount; it does not disappear when you make a deposit.

If you have an overdraft line and you use it, you will see the borrowed amount listed separately on your account statement. You can pay it back all at once or in installments, but interest accrues until the balance is zero.

What to do if you overdraft by accident

If you overdraft and are charged a fee, contact Bank of America as soon as you notice it. Explain the situation — whether it was a timing issue, a duplicate charge, or a mistake on your part. Bank of America has discretion to reverse one overdraft fee per year if you have a good account history. They will not reverse every fee, but it is worth asking, especially if the overdraft was caused by a bank error or an unusual circumstance.

To prevent future overdrafts, set up overdraft protection with a linked savings account, or turn off overdraft coverage entirely and let transactions be declined. You can also set up low-balance alerts in the Bank of America app so you get a notification when your balance drops below a certain amount — say, $100. This gives you a chance to transfer money in before you overdraft.

If you are regularly overdrafting, it is a sign that your spending is outpacing your income. Consider making a budget, cutting expenses, or looking for ways to increase income. Overdraft fees are expensive and add up quickly, so breaking the cycle is worth the effort.

Frequently Asked Questions

Can Bank of America decline my transaction instead of overdrafting me?

Yes. If you turn off overdraft coverage, the bank will decline any transaction that would overdraw your account. You will not be charged a fee, and your account will not go negative. This is the default setting for most accounts, so you have to actively turn on overdraft coverage to be charged fees.

Will Bank of America overdraft me on ATM withdrawals?

Yes, if overdraft coverage is on. ATM withdrawals are treated like any other transaction. If you withdraw more than your balance, you overdraft and pay the fee. This is one reason to keep overdraft coverage off — ATM withdrawals are easy to forget about, and overdrafting at an ATM can happen without you realizing it until the fee appears.

How long do I have to repay an overdraft?

There is no set repayment timeline. You owe the negative balance immediately, and interest accrues until you repay it. If you do not repay it within a certain period — typically 30 to 60 days, depending on the account — Bank of America may close your account and report the debt to a collection agency.

Does overdrafting hurt my credit score?

Overdrafting itself does not show up on your credit report. However, if your account goes to collections because you did not repay the negative balance, that collection account will appear on your credit report and damage your score. Bank of America may also report the account to ChexSystems, a banking history database, which makes it harder to open accounts at other banks.

Can I overdraft with a debit card at a store?

Yes, if overdraft coverage is on. Debit card transactions at stores are treated the same as ATM withdrawals or checks. The transaction will go through if overdraft coverage is enabled, and you will be charged a fee if it overdraws your account. If overdraft coverage is off, the transaction will be declined at the point of sale.