Your bank will charge you an overdraft fee, usually $25 to $35 per transaction that pushes you below zero

When you spend more money than you have in your checking account, the bank covers the difference temporarily — but charges you for doing it. This fee is called an overdraft fee or non-sufficient funds (NSF) fee. The amount varies by bank, but most charge between $25 and $35 each time a transaction goes through while your balance is negative.

The fee itself makes your balance even more negative. If you had $10 in your account and spent $50, you now owe the bank $40 plus the fee — often $65 or more total. Multiple transactions in a single day can trigger multiple fees, sometimes stacking up to $100 or more before you notice.

Some banks charge a daily fee if your account stays negative for more than a day or two. Others charge one fee per transaction, regardless of how many go through. A few charge both. You need to know your specific bank's policy because the cost of staying negative varies widely.

Key Takeaways

  • Each transaction that overdrafts your account typically costs $25 to $35 in fees, and multiple transactions in one day can each trigger a separate fee.
  • Your bank may also charge a daily fee if your account remains negative, adding to the total cost of the overdraft.
  • Overdraft protection — a link to a savings account or credit line — can prevent fees by automatically covering the shortfall, though it may charge a smaller transfer fee instead.
  • You can ask your bank to reverse recent overdraft fees, especially if this is your first time or if the fees were caused by a bank error.
  • Opting out of overdraft coverage means transactions will be declined rather than approved, preventing fees but also preventing you from spending money you don't have.

How overdraft fees stack up in a single day

Banks process transactions in a specific order, usually largest to smallest, rather than the order you made them. This matters because it can create more overdrafts than you expect. Say you have $100 in your account. You buy groceries for $40, get gas for $30, and then buy coffee for $5. If the bank processes the $40 and $30 first, your balance drops to $30, and the $5 coffee purchase goes through fine. But if the bank processes the $40, then the $30, then the $5, and the system decides to process the largest transaction first, it might process the $40 first (balance: $60), then the $30 (balance: $30), then the $5 (balance: $25) — no overdraft.

However, if you made a larger purchase first that day — say a $120 online order — the bank might process that before the smaller transactions. Now your balance is negative $20 after the first transaction, and each of the three smaller purchases triggers its own overdraft fee. You end up paying $75 to $105 in fees on top of the $120 you spent, even though you only overspent by $20.

This is why checking your balance before spending matters, and why some people find their overdraft fees shocking — they don't realize how the order of processing works or how many separate fees they've triggered.

Overdraft protection: automatic coverage from a linked account

Overdraft protection is a service that automatically transfers money from another account (usually your savings account) or from a credit line when your checking account would go negative. Instead of paying a $30 overdraft fee, you might pay a $1 to $3 transfer fee, or nothing at all.

This only works if you have a linked savings account with enough money in it, or if the bank has approved you for an overdraft line of credit. Not all banks offer this, and you have to set it up in advance — it does not happen automatically just because you have two accounts with the same bank.

Overdraft protection prevents the overdraft fee but does not prevent you from spending money you do not have. If you use the protection to cover a $50 overdraft, you still owe that $50 — it just came from your savings account instead of triggering a fee. You still need to repay what you borrowed.

Opting out of overdraft coverage entirely

You have the right to tell your bank not to cover overdrafts. When you opt out, transactions that would make your account negative are straightforward declined — they do not go through, and you do not pay a fee. Your debit card is rejected at the register, or the online payment fails to process.

This prevents overdraft fees but can be embarrassing or inconvenient in the moment. Your payment might fail in front of other people, or a bill you thought was paid might bounce. However, many people find this preferable to the surprise of large fees weeks later.

You can change this setting at any time by contacting your bank or using their online banking portal. Some banks ask you to confirm your choice every year or when you open a new account, so check your current settings if you are unsure what you have chosen.

What to do if you have overdraft fees you cannot pay back when ready

If your account is negative and you cannot deposit money right away, the negative balance will remain until you do. The bank will not close your account or take legal action over a small overdraft, but they may eventually close it if the account stays negative for months. Some banks charge a monthly fee on negative accounts after a certain point.

Contact your bank and ask if they will reverse the overdraft fees. Many banks will reverse one or two fees if you have a good history with them, especially if this is your first overdraft or if the bank made an error. They are not required to do this, but it costs nothing to ask. Be honest about what happened — "I did not realize the transaction would go through" or "I miscalculated my balance" is more likely to get a reversal than no explanation at all.

Once you deposit money, your balance will become positive again. The fees are gone, but the lesson is not — overdrafts are expensive, and checking your balance before spending is the simplest way to avoid them.

How overdrafts affect your banking record

A single overdraft does not appear on your credit report and does not damage your credit score. However, if your account stays negative for a long time or you overdraft repeatedly, the bank may report you to ChexSystems, a banking history database that other banks check when you try to open a new account.

Being reported to ChexSystems can make it harder to open a checking account at other banks for several years. Some banks will still work with you, but they may require a larger deposit or offer limited account features. This is why repeated overdrafts matter more than a single one — they signal to banks that you may not manage your account carefully.

If you have overdrafted multiple times, focus on keeping your balance positive going forward. Most ChexSystems records clear after three to five years of good account management.

Frequently Asked Questions

Can a bank refuse to let me close my account if it is negative?

Yes. Most banks will not let you close an account with a negative balance. You must deposit enough money to bring it to zero first. If you do not, the bank may send the debt to a collection agency or pursue it through small claims court, though this is rare for small amounts.

Will my overdraft show up when I try to open a new bank account?

It may. If the overdraft was reported to ChexSystems, other banks will see it when they check your history. Some banks will still open an account for you; others will decline. It depends on the bank and how recent the overdraft was.

What is the difference between an overdraft fee and a returned check fee?

An overdraft fee is charged when the bank covers a transaction that would make your account negative. A returned check fee is charged when the bank refuses to cover it and the check bounces. The fee amount is similar, but the outcome is different — one goes through, one does not.

Can I get overdraft fees waived if I set up a payment plan?

Some banks will waive or reduce fees if you agree to keep a minimum balance or set up automatic deposits. This varies by bank and by how much you owe. It is worth asking, especially if you have been a customer for a long time.

Does overdraft protection cost money even if I do not use it?

No. Overdraft protection itself is free — you only pay if it actually transfers money to cover an overdraft. The transfer fee (usually $1 to $3) is only charged when the protection is used.