Yes, Bank of America allows overdrafts, but you pay a fee each time it happens
Bank of America will let your checking account go negative if you don't have enough money to cover a transaction. When this happens, the bank covers the shortfall and charges you an overdraft fee. This is not automatic protection — it's a service the bank provides, and each overdraft costs you money.
The key thing to understand is that overdrafts are not free. Bank of America charges a fee (called an "overdraft item fee") each time a transaction causes your account to go below zero. You can also turn overdraft protection off entirely if you prefer transactions to be declined instead.
Key Takeaways
- Bank of America charges an overdraft fee each time a transaction overdraws your account, and you can have multiple fees in a single day.
- You can link a savings account or credit card to your checking account to cover overdrafts automatically, which may cost less than overdraft fees.
- You can turn off overdraft protection so transactions are declined instead of going through and charging you a fee.
- The bank will not overdraft ATM withdrawals or recurring debit card transactions unless you specifically turn that on.
What happens when you overdraft at Bank of America
When you make a purchase, write a check, or set up a bill payment that exceeds your account balance, Bank of America covers the difference. Your account goes negative, and you receive an overdraft fee. The fee is charged to your account when ready, which can push you further into the negative and trigger additional fees.
Bank of America limits the number of overdraft fees you can be charged in a single day. The bank will not charge more than a certain number of overdraft fees per day, though the exact limit can vary. You should contact Bank of America directly or check your account agreement to confirm the current daily limit.
The overdraft fee applies to checks, automatic bill payments, and one-time debit card transactions. It does not automatically explore to ATM withdrawals or recurring debit card payments — those will be declined if you don't have funds, unless you specifically request overdraft coverage for those transaction types.
Overdraft fees and daily limits
Bank of America charges a fee for each overdraft transaction. The amount of this fee varies and can change, so you should check your account agreement or contact the bank for the current fee amount. Some checking accounts may have different fee structures depending on the account type.
The bank also sets a daily limit on how many overdraft fees you can incur in one day. This means that even if you make ten transactions that overdraft your account, you will not be charged ten separate fees. Once you hit the daily limit, additional overdrafts that day will not trigger additional fees, though your account will still be overdrawn.
If your account stays overdrawn for several days, Bank of America may charge additional fees. These are separate from overdraft fees and are charged for maintaining a negative balance. You should bring your account back to zero as soon as possible to avoid these additional charges.
Overdraft protection through linked accounts
Instead of paying overdraft fees, you can link a savings account or credit card to your checking account. If a transaction would overdraft your checking account, the bank automatically transfers money from the linked account to cover it. This is called overdraft protection, and it may cost less than overdraft fees.
If you link a savings account, the transfer is usually free or costs a small fee per transfer. If you link a credit card, the bank treats it as a cash advance, which typically comes with a fee and interest charges. A linked savings account is usually the cheaper option if you have one available.
You set up overdraft protection through your Bank of America online account or by visiting a branch. You choose which account to link and which types of transactions should trigger a transfer. Once it's set up, the bank handles the transfer automatically when needed.
Turning off overdraft protection
You can turn off overdraft protection so that transactions are declined instead of overdrawn. When overdraft protection is off, if you try to make a purchase and don't have enough money, the transaction will be rejected at the point of sale. You won't pay an overdraft fee, but the transaction won't go through.
This is useful if you want to avoid overdraft fees entirely and prefer to know when ready when you're out of money. Debit card transactions and checks will be declined. Recurring bill payments and ACH transfers may still go through and overdraft your account even with protection off — you should contact Bank of America to confirm which transaction types are affected.
You can change your overdraft settings at any time through your online account or by calling the bank. The change usually takes effect within one business day.
How overdrafts affect your banking record
Overdrafts do not directly appear on your credit report. Bank of America reports overdrafts to ChexSystems, which is a banking history system separate from credit bureaus. If you have multiple overdrafts or don't repay them, it can make it harder to open accounts at other banks in the future.
If your account stays overdrawn for an extended period and you don't pay it back, Bank of America may close your account. The bank may also report the unpaid overdraft to a collection agency, which could affect your credit score and your ability to open new accounts.
Repaying overdrafts promptly helps you avoid these consequences. Deposit money to bring your account back to zero as soon as you can, and contact the bank if you need to discuss a payment plan for a large overdraft.
Frequently Asked Questions
Can I overdraft my Bank of America account at an ATM?
No, ATM withdrawals will not overdraft your account by default. If you don't have enough cash in your account, the ATM will decline the withdrawal. You can request overdraft protection for ATM withdrawals, but it is not turned on automatically.
What's the difference between overdraft fees and NSF fees?
An overdraft fee is charged when the bank covers a transaction and your account goes negative. An NSF (non-sufficient funds) fee is charged when a transaction is declined because you don't have enough money. Bank of America uses the term "overdraft item fee" for transactions it covers.
How long do I have to pay back an overdraft?
Bank of America does not set a specific repayment important date for overdrafts. However, if your account stays negative for an extended period, the bank may close your account or send the debt to a collection agency. You should deposit money to cover the overdraft as soon as possible.
Will overdrafts show up on my credit report?
Overdrafts do not appear on your credit report directly. They are reported to ChexSystems, a banking history database. Multiple overdrafts or unpaid overdrafts can make it difficult to open accounts elsewhere, and unpaid overdrafts sent to collections will affect your credit score.
Can Bank of America reverse an overdraft fee?
Bank of America may reverse one or two overdraft fees if you contact them and explain your situation, especially if you have a good account history. There is no may provide, and the bank is not required to reverse fees. It's worth asking, but you should not count on a reversal.