Bank of America lets you overdraft through three separate mechanisms, each with different costs and triggers
Bank of America does not automatically overdraft your account. Instead, you can overdraft in three ways: through an overdraft line of credit (a separate credit product), through overdraft protection (which pulls money from a linked account), or by paying the overdraft fee when the bank covers a transaction that would otherwise decline. The first two require you to set them up in advance. The third happens automatically if you have not opted out, but it costs you $35 per overdraft.
Which route you take depends on what you want to happen when your balance goes negative. If you want the transaction to go through without a fee, you need overdraft protection or the credit line. If you are willing to pay per overdraft, you do nothing — the bank will cover it and charge you. If you want transactions to decline instead, you can opt out of overdraft coverage entirely.
Key Takeaways
- Bank of America's overdraft fee is $35 per transaction, charged only if the bank covers a negative balance, and you can opt out of this coverage.
- Overdraft protection links a savings account, money market account, or credit card to your checking account and transfers money automatically when your balance goes negative.
- An overdraft line of credit is a separate credit product that acts like a small loan; you pay interest on what you borrow, not a flat fee per transaction.
- The bank does not charge a fee for using overdraft protection or the credit line itself — you pay only interest on borrowed amounts or transfer fees if applicable.
- You set up overdraft protection or request a credit line through your Bank of America account online, by phone, or in a branch.
Overdraft protection: moving money from another account automatically
Overdraft protection is the simplest way to prevent overdraft fees. You link a second Bank of America account — a savings account, money market account, or credit card — to your checking account. When a transaction would overdraw your checking account, the bank automatically transfers money from the linked account to cover it.
You set this up through your Bank of America online account under "Account Services" or by calling the customer service number on the back of your card. The bank will ask which account you want to link as your backup. There is no fee for the transfer itself, though some account types (like money market accounts) may have limits on how many transfers you can make per month under federal rules.
The main risk is that you can overdraft your backup account if you are not watching both balances. If you link a savings account and the bank transfers $500 to cover a checking overdraft, your savings account balance drops by $500. If you then spend more from checking without realizing the savings account is now low, you can trigger another transfer and end up overdrawn in both places.
Overdraft line of credit: borrowing money instead of transferring it
Bank of America offers a separate overdraft line of credit, which works differently from overdraft protection. Instead of moving money from another account, the bank lends you money when your balance goes negative. You pay interest on the borrowed amount, not a flat fee per transaction.
To request this product, you contact Bank of America directly — online through your account, by phone, or in a branch. The bank will review your account history and credit to decide whether to offer you a line and how much. The credit limit is typically small, often $500 to $1,000, though it varies based on your account standing and credit profile.
Interest accrues daily on the borrowed balance. The rate varies and is not fixed; Bank of America sets it based on the prime rate. You repay the borrowed amount whenever you deposit money into your account — the bank applies deposits to the overdraft balance first before crediting your available balance. This means you cannot avoid paying interest by leaving the account overdrawn; interest keeps accumulating until the balance is zero.
The $35 overdraft fee: what happens if you do nothing
If you do not set up overdraft protection or a credit line, Bank of America will still cover overdrafts — but it charges you $35 per transaction that overdraws your account. This fee applies only if the bank actually covers the transaction; if you decline overdraft coverage entirely (see below), transactions straightforward decline and no fee is charged.
The bank can charge up to four overdraft fees per day, meaning a bad day of spending could cost you $140 in fees alone. These fees are separate from any interest you might owe if the account stays negative for several days. The fee hits your account when ready, which can push you further into the negative and trigger more overdraft fees.
You can see which transactions triggered overdraft fees in your transaction history. Bank of America lists them as "Overdraft Fee" or "Overdraft Item Fee" depending on the transaction type. If you dispute a fee — for example, if you believe the bank processed transactions out of order — you can contact customer service, though the bank is not required to reverse it.
Opting out of overdraft coverage entirely
You can tell Bank of America that you do not want the bank to cover overdrafts. When you opt out, transactions that would overdraw your account straightforward decline instead. You will not be charged an overdraft fee, but the transaction will not go through.
To opt out, log into your Bank of America account online, go to "Account Services," and look for overdraft settings. You can also call customer service or visit a branch. The bank will confirm your choice and may ask you to verify it in writing, though online confirmation is usually sufficient.
Opting out protects you from overdraft fees but means you need to monitor your balance carefully. A declined debit card transaction at a store is inconvenient, but it costs you nothing. A declined check or automatic bill payment can have other consequences — a utility company might charge a late fee if your payment declines, for example — so opting out does not eliminate all risk, only overdraft fees specifically.
How Bank of America orders transactions and when overdrafts trigger
The order in which Bank of America processes transactions affects when your account goes negative and how many overdraft fees you incur. The bank processes transactions in this sequence: checks and ACH transfers first (in the order received), then debit card transactions (in the order they post, which may not be the order you made them), then ATM withdrawals.
This matters because if you have $100 in your account and you make a $60 debit card purchase, then a $50 check clears, the check might process first and overdraw your account before the debit card transaction posts. You could end up with two overdraft fees instead of one, even though you made the debit purchase first. Bank of America does not reorder transactions to minimize overdrafts; it follows its standard processing order.
Overdraft protection and the credit line both trigger based on the balance after each transaction posts. If your balance goes negative at any point during the day, the protection kicks in. If you have both overdraft protection and a credit line set up, the bank typically uses overdraft protection first (the transfer from your linked account), then the credit line if the linked account does not have enough to cover the overdraft.
Costs and limits across the three options
| Option | Cost | How it works | Setup required |
|---|---|---|---|
| Overdraft fee (no protection) | $35 per transaction, up to 4 per day | Bank covers overdraft; you pay a flat fee | None — happens automatically unless you opt out |
| Overdraft protection | No fee; may have transfer limits | Automatic transfer from linked account | Link a savings, money market, or credit card account online or by phone |
| Overdraft line of credit | Interest on borrowed amount (rate varies) | Bank lends you money; interest accrues daily | Request from Bank of America; bank approves based on account and credit |
The cheapest option depends on how often you overdraft. If you overdraft once or twice a year, the $35 fee is less expensive than paying interest on a credit line. If you overdraft regularly, interest on a credit line might be cheaper — though the best option is to avoid overdrafting altogether by monitoring your balance.
Frequently Asked Questions
Can I have both overdraft protection and a credit line at the same time?
Yes. If you have both set up, overdraft protection typically triggers first. The bank transfers money from your linked account, and if that account does not have enough, the credit line covers the remaining overdraft. This gives you a backup if your primary overdraft protection account runs low.
What happens if I overdraft my linked account through overdraft protection?
Your linked account can go negative if the bank transfers more money than it contains. You then owe that overdraft balance on the linked account. If overdraft protection is also set up on that account, it may trigger another transfer, or you may be charged an overdraft fee. Monitor both account balances to avoid this.
Does Bank of America charge interest on overdraft fees?
No. The $35 overdraft fee is a one-time charge, not a loan. However, if your account stays negative for several days, the bank may charge additional overdraft fees for each day or each transaction. Interest applies only to the overdraft credit line, not to overdraft fees.
Can I increase my overdraft line of credit limit?
You can request an increase by contacting Bank of America, but approval depends on your account history and credit. The bank may increase it, decrease it, or keep it the same. There is no may provide of an increase, and the bank can reduce your limit at any time.
What if I opt out of overdraft coverage and then change my mind?
You can opt back in at any time through your online account, by phone, or in a branch. The change usually takes effect when ready, though it may take up to one business day to process. You will be charged overdraft fees again for any transactions that overdraw your account after you opt back in.