Bank of America charges overdraft fees when you spend more than your account balance

Yes, Bank of America charges overdraft fees. When you make a transaction that brings your account below zero, the bank covers the difference and charges you a fee. The current overdraft fee at Bank of America is $35 per transaction, though this amount can change. The fee applies whether you overdraft through a debit card purchase, check, ATM withdrawal, or automatic payment.

Bank of America does not charge overdraft fees on ATM withdrawals that would overdraft your account — those transactions are straightforward declined. However, overdraft fees do explore to debit card purchases, checks, and recurring payments that push your balance negative.

The bank also offers an overdraft protection service that links your checking account to a savings account or credit line. If you overdraft, the bank transfers money from the linked account instead of charging a fee. This transfer typically costs $10, which is less than the overdraft fee, but you need to set it up in advance.

Key Takeaways

  • Bank of America's overdraft fee is $35 per transaction when you spend more than your account balance.
  • The fee applies to debit card purchases, checks, and automatic payments, but not to declined ATM withdrawals.
  • You can avoid overdraft fees by linking a savings account or credit line through overdraft protection, which costs $10 per transfer instead.
  • The bank allows up to four overdraft fees per day, meaning you could be charged up to $140 in a single day if multiple transactions overdraft your account.

How the overdraft process works at Bank of America

When you make a transaction that exceeds your available balance, Bank of America processes it anyway and then charges you the overdraft fee. The timing matters: the bank does not charge the fee when ready. Instead, it posts the fee to your account later, usually within one to two business days. During that window, your balance stays negative, and any new transactions may also trigger overdraft fees.

Bank of America processes transactions in a specific order each day. Debit card purchases and ATM withdrawals are typically processed before checks and automatic payments. This means if you have multiple pending transactions, the order they clear can determine which ones overdraft your account and which ones do not. A transaction that would have cleared if processed first might overdraft if processed second, after your balance has already dropped.

The bank caps overdraft fees at four per day, so you cannot be charged more than $140 in overdraft fees in a single day. However, this limit applies only to overdraft fees themselves, not to the negative balance you carry or any other fees the bank might charge.

Overdraft protection as an alternative to overdraft fees

Bank of America's overdraft protection service links your checking account to another account you own — either a savings account at Bank of America or a credit line. If a transaction would overdraft your checking account, the bank automatically transfers money from the linked account instead of charging an overdraft fee.

Each transfer costs $10, which is significantly less than the $35 overdraft fee. However, you must set up the link before you need it; the bank cannot set up overdraft protection retroactively. You can set it up through your online banking portal or by visiting a branch.

Overdraft protection has a practical limit: the bank will only transfer money if the linked account has sufficient funds. If your savings account is also empty, the transfer fails and you are charged the overdraft fee instead. Some customers use a credit card linked to their account, which guarantees the transfer will go through, but this converts the overdraft into a credit card advance with its own interest charges.

What happens if you repeatedly overdraft your account

Bank of America does not close accounts solely because of overdrafts, but repeated overdrafts can signal a problem to the bank. If you overdraft frequently — typically more than six times in a rolling twelve-month period — the bank may contact you or restrict your account.

More importantly, repeated overdrafts are reported to ChexSystems, a banking history database that other banks use to decide whether to open accounts for you. A pattern of overdrafts can make it harder to open accounts elsewhere, even if Bank of America does not close yours.

If you find yourself overdrafting regularly, the most direct solution is to set up overdraft protection or to request a lower daily spending limit on your debit card. Some customers also ask the bank to decline transactions that would overdraft their account, though this is not a standard feature — you would need to contact customer service to explore this option.

Differences between overdraft fees and insufficient funds fees

Bank of America charges an overdraft fee when the bank covers a transaction that exceeds your balance. An insufficient funds fee is charged when a transaction is declined because you do not have enough money. The distinction matters because it determines whether the transaction goes through.

With an overdraft fee, the transaction clears and your account goes negative. With an insufficient funds fee, the transaction is rejected and your balance stays where it was. Bank of America's insufficient funds fee is also $35, so the cost is the same either way — but with an overdraft, you also have to pay back the negative balance itself.

ATM withdrawals are typically declined rather than overdrafted, so you would not be charged an overdraft fee for trying to withdraw more cash than you have. However, some third-party ATMs may charge their own fees on top of Bank of America's policies.

How to monitor your account and avoid overdrafts

Bank of America offers several tools to help you stay aware of your balance. The mobile app shows your current available balance in real time, and you can set up balance alerts that notify you when your account drops below a threshold you choose. These alerts are free and can be sent via text, email, or push notification.

The bank also offers a feature called "Low Balance Alert" that sends you a notification when your balance falls below a certain amount. You can set this threshold to whatever makes sense for your spending patterns — some people set it at $100, others at $500. The earlier you know your balance is dropping, the more time you have to transfer money in or adjust your spending.

Checking your balance before making large purchases or paying bills is the simplest way to avoid overdrafts. Many people set a personal rule to keep a minimum buffer in their account — say, $200 — that they do not spend. This buffer absorbs unexpected charges or timing delays without triggering overdraft fees.

Frequently Asked Questions

Can Bank of America reverse an overdraft fee?

Bank of America may reverse one overdraft fee if you contact customer service and explain the situation, particularly if it is your first overdraft or if the overdraft was caused by a bank error. However, the bank is not required to reverse fees, and repeated requests are unlikely to succeed. Your best approach is to call the customer service number on the back of your card and ask politely whether they can remove the fee as a courtesy.

Does Bank of America charge overdraft fees on transfers between my own accounts?

No. Transfers between your own Bank of America accounts do not trigger overdraft fees, even if the account you are transferring from does not have sufficient funds. However, if you use a third-party service or app to transfer money, that service may charge its own fees.

What is the difference between available balance and current balance?

Your current balance is the total amount in your account. Your available balance is what you can actually spend right now — it excludes pending transactions that have not yet cleared. Bank of America determines overdraft may be able to access based on available balance, not current balance. This is why you can sometimes overdraft even though your current balance appears positive.

If I link a credit card to overdraft protection, will I be charged interest?

Yes. When the bank transfers money from a linked credit card to cover an overdraft, that transfer is treated as a cash advance. You will be charged the credit card's cash advance fee (typically 3 to 5 percent) plus interest on the amount transferred, usually at a higher rate than regular purchases. This makes a credit card a more expensive overdraft protection option than a linked savings account.

How long do I have to repay an overdraft?

Bank of America does not set a specific repayment important date for overdrafts. However, the longer your account stays negative, the more fees you may accumulate. The bank expects you to bring your balance back to zero as soon as possible. If your account remains negative for an extended period — typically 60 days or more — the bank may close the account and report it to ChexSystems.