Yes, your bank account can go negative, and the bank will charge you for it
A bank account goes negative when you spend more money than you have in it. This happens most often when you write a check, use your debit card, or set up an automatic payment without realizing your balance is too low. The bank will process the transaction anyway — but then charge you a fee, usually called an overdraft fee or non-sufficient funds (NSF) fee.
The negative balance itself is not a crime, and the bank will not close your account for one overdraft. But if you stay negative for too long or overdraft repeatedly, the bank may freeze your account or close it without warning. The longer you stay negative, the more fees pile up, and the harder it becomes to get back to zero.
Understanding how overdrafts work — and what your options are to stop them — can save you hundreds of dollars a year.
Key Takeaways
- When you overdraw your account, the bank charges a fee (typically $25 to $35 per transaction) on top of the negative balance you owe.
- Multiple overdrafts in a short time can trigger multiple fees, and some banks charge a daily fee if your account stays negative for several days.
- You can turn off overdraft protection to prevent transactions from going through if you do not have enough money, which stops the fees but may cause checks or bills to bounce.
- If you stay negative for 30 to 60 days without depositing money, the bank may close your account and report you to ChexSystems, making it harder to open a new account elsewhere.
- Some banks and credit unions offer accounts with no overdraft fees or lower fees, which may be worth switching to if you overdraft often.
How overdraft fees work
When your account balance drops below zero, the bank charges you a fee for allowing the transaction to go through. This fee is separate from the negative balance itself. If your balance is $50 and you spend $75, you now owe $25 plus the overdraft fee — often $25 to $35, depending on your bank.
The fee hits your account when ready, which makes your negative balance even deeper. If you have another transaction pending, the bank may charge another overdraft fee for that one too. A single day of overdrafting can result in two, three, or more fees stacking up.
Some banks also charge a daily fee if your account stays negative for more than a few days. This daily fee (sometimes called a sustained overdraft fee) can range from $5 to $15 per day. If you stay negative for a week, you could owe $35 to $105 in daily fees alone, on top of the original overdraft fees.
When the bank closes your account for being negative
Banks do not close accounts after a single overdraft. But if your account stays negative for 30 to 60 days without a deposit, the bank will usually close it. Some banks wait longer; others act faster. The bank will send you a notice before closing, but the timeline is short.
When a bank closes your account for a negative balance, you still owe the money. The bank may send the debt to a collection agency, which will contact you to recover it. More when ready, the bank reports the closure to ChexSystems, a banking history database that most banks check before opening a new account for you. A ChexSystems report can make it very difficult to open a checking or savings account at another bank for up to five years.
If you have a negative balance and receive a closure notice, contact the bank right away. Depositing enough money to bring your account to zero before the important date can prevent the closure and the ChexSystems report.
Overdraft protection: what it is and whether to use it
Overdraft protection is a service that lets the bank cover a transaction even if you do not have enough money. The bank charges a fee, but the transaction goes through instead of bouncing. Without overdraft protection, a transaction that would overdraw your account is straightforward declined — your debit card is rejected at the store, or a check bounces.
Overdraft protection sounds helpful, but it can be expensive. If you overdraft five times in a month, you pay five overdraft fees. If you turn off overdraft protection, your card is declined instead, which is free but embarrassing and inconvenient.
Some banks offer overdraft transfer protection, which moves money from a linked savings account to cover the overdraft instead of charging a fee. This is usually free or costs $1 to $3 per transfer. If you have a savings account with a buffer of a few hundred dollars, this option can save you money.
You can turn overdraft protection on or off through your bank's website, mobile app, or by calling customer service. Check your current settings — many banks turn it on by default.
Banks and credit unions with lower or no overdraft fees
Not all banks charge the same overdraft fees. Some online banks and credit unions charge much less or nothing at all. If you overdraft regularly, switching banks may save you hundreds of dollars per year.
Some banks offer no overdraft fees on transactions under a certain amount (often $50 to $100). Others charge a flat fee of $10 to $15 instead of $25 to $35. A few online banks do not charge overdraft fees at all, though they may decline transactions instead of allowing them to go negative.
Credit unions, which are member-owned and often have lower fees than banks, sometimes offer overdraft protection through transfers from a savings account at no cost. If you are a member of a credit union, ask about their overdraft policies before switching banks.
How to avoid overdrafting in the first place
The simplest way to avoid overdraft fees is to keep a small buffer in your account — $50 to $100 that you do not spend. This cushion catches small mistakes or unexpected charges before they trigger a fee.
Set up balance alerts through your bank's app or website. Most banks let you choose a threshold (for example, $200) and send you a text or email when your balance drops below it. This gives you time to deposit money or pause spending before you overdraft.
If you use automatic bill payments, write them down and track them on a calendar. Overdrafts often happen because someone forgets when a large payment is coming out. Knowing the dates lets you plan ahead.
Check your account balance before making large purchases or withdrawals. A quick look at your phone takes five seconds and can prevent a $35 fee.
What to do if you have already overdrafted
If your account is negative, deposit money as soon as you can to bring it back to zero. The sooner you do this, the fewer daily fees you will owe. If you cannot deposit the full amount, deposit what you can — it shows the bank you are working to fix it.
Call your bank and ask if they will waive the overdraft fee. Banks sometimes do this for customers with good history, especially if it is a first overdraft. Be polite and honest about what happened. You will not always get the fee waived, but asking takes two minutes and sometimes works.
If you have multiple overdraft fees and the bank refuses to waive them, ask to speak with a supervisor or visit a branch in person. Supervisors have more authority to adjust fees than phone representatives do.
Do not ignore a negative balance. The longer it sits, the more fees accumulate and the closer you get to the bank closing your account.
Frequently Asked Questions
Can the bank charge me interest on a negative balance?
No. Banks charge overdraft fees, not interest, on negative balances. However, if your account is sent to a collection agency, the debt collector may add interest or collection fees on top of what you owe the bank.
Will overdrafting hurt my credit score?
Overdrafting itself does not show up on your credit report and does not hurt your credit score. But if the bank closes your account and sends the debt to a collection agency, that collection account will appear on your credit report and damage your score.
What is the difference between overdraft and bouncing a check?
With overdraft protection on, the bank covers the transaction and charges a fee. With overdraft protection off, the transaction is declined and the check bounces — no fee, but the check fails and the person you wrote it to does not get paid. Bouncing a check can also damage your reputation with that person or business.
Can I get my overdraft fees back if I dispute them?
You can ask the bank to reverse the fees, but whether they will depends on your account history and the bank's policy. If you have been a customer for years with no overdrafts, the bank is more likely to help. If you overdraft frequently, they are less likely to waive fees.
What happens if I never pay back a negative balance?
The bank will close your account after 30 to 60 days and report it to ChexSystems. The debt may go to a collection agency, which will contact you to collect. You will have trouble opening a bank account elsewhere for several years.