Yes, Bank of America allows overdrafts, but the terms depend on your account type and settings

Bank of America permits overdrafts on most checking accounts, meaning the bank will cover transactions that exceed your balance. However, this comes with fees and specific rules about which transactions trigger overdraft coverage and which do not. The bank does not automatically overdraft every account — you must have overdraft coverage turned on, and even then, the bank decides whether to honor each transaction based on your account history and the amount.

Understanding what Bank of America will and will not cover, and what it costs when they do, matters because overdraft fees add up quickly. A single overdraft can cost $35, and multiple overdrafts in one day can each carry a separate fee.

Key Takeaways

  • Bank of America overdraft coverage is not automatic — you must opt in through your account settings or by phone, and the bank can still decline to cover a transaction.
  • Overdraft fees are $35 per transaction, and the bank can charge up to four overdraft fees per day, meaning a single day could cost $140.
  • Debit card transactions, ATM withdrawals, and checks are treated differently — some are covered by overdraft protection and some are not, depending on your settings.
  • Bank of America offers overdraft transfer as an alternative, which moves money from a linked savings account instead of charging a fee.
  • The bank's overdraft decision depends partly on your account history and relationship with them, not just your current balance.

What transactions Bank of America will overdraft

Bank of America covers checks, automatic bill payments (ACH transfers), and debit card transactions at their own ATMs. These are the core transactions most likely to be honored even if your balance is negative. The bank will not overdraft ATM withdrawals at other banks' machines, and debit card transactions at merchants outside the United States may not be covered either.

Online bill payments through your Bank of America account are typically covered, but transfers to other banks (external transfers) usually are not. If you try to move money to an account at another institution and you do not have the funds, the transfer will usually fail rather than overdraft.

The bank also sets a limit on how much it will overdraft you. Most accounts have a maximum overdraft amount, often between $100 and $500, though this varies by account type and your banking history with them. If a transaction would push you past that limit, the bank will decline it even if overdraft coverage is on.

How to turn overdraft coverage on or off

You control overdraft coverage through your Bank of America online account or mobile app. Log in, go to Account Settings, and look for "Overdraft Coverage" or "Overdraft Protection." You will see options to turn overdraft coverage on or off for different transaction types. Some accounts let you choose coverage for debit card transactions separately from checks and ACH payments.

You can also call Bank of America at 1-800-432-1000 to change your overdraft settings over the phone. Have your account number ready. The change usually takes effect immediately, though it may take up to one business day to show in your online settings.

If you turn overdraft coverage off, the bank will decline transactions that exceed your balance rather than charging you a fee. This means your debit card will be rejected at the register, and checks will bounce, but you will not incur overdraft fees.

Overdraft fees and daily limits

Bank of America charges $35 per overdraft transaction. The bank can charge up to four overdraft fees in a single day, meaning you could be charged $140 if you overdraft four separate times on the same day. These fees are charged to your account immediately, which can push you further into the negative and trigger additional overdraft fees.

The bank also has an overdraft fee waiver policy: if you have not had an overdraft fee in the past 12 months, Bank of America will waive your first overdraft fee. After that, you pay the full $35 per overdraft. This waiver applies once per 12-month period, not once per month.

If your account stays overdrawn for more than a few days, the bank may close your account and send your balance to collections. The exact timeline varies, but accounts that remain negative for 30 days or longer are at risk of closure.

Overdraft transfer as an alternative to overdraft fees

Bank of America offers overdraft transfer, which is different from overdraft coverage. With overdraft transfer, you link your checking account to a savings account, and if your checking balance goes negative, the bank automatically moves money from savings to cover it. This costs $10 per transfer instead of $35 per overdraft, and it prevents your account from going negative in the first place.

To set up overdraft transfer, go to your account settings online or call the bank. You must have both a checking and savings account at Bank of America, and the savings account must have enough money in it to cover the transfer. The bank will transfer money in increments (often $100 at a time), so if you overdraft by $50, it may transfer $100 from savings and charge you $10.

Overdraft transfer is usually cheaper than overdraft coverage if you overdraft more than twice a year, because $10 is less than $35. However, it only works if you have money in a linked savings account — if both accounts are empty, the transfer will not happen and you will be charged an overdraft fee instead.

What happens if you repeatedly overdraft

Bank of America tracks overdraft patterns. If you overdraft frequently, the bank may contact you to discuss your account or suggest you switch to a different account type. Repeated overdrafts can also affect whether the bank approves you for credit products like loans or credit cards in the future.

If your account remains overdrawn for 30 days or longer, Bank of America will typically close it and report the negative balance to ChexSystems, a banking history database. This makes it harder to open accounts at other banks. You will also owe the bank the full negative balance before they close the account.

Some Bank of America accounts, like their SafePass checking account (available in certain states), have no overdraft fees at all — transactions are simply declined if you do not have the funds. If you overdraft frequently, switching to an account with no overdraft option might be worth considering.

How overdraft decisions are made

Bank of America does not overdraft every transaction automatically, even if overdraft coverage is on. The bank uses factors like your account history, how long you have been a customer, your typical balance, and the size of the transaction to decide whether to honor it. A $20 transaction when you are $5 overdrawn is more likely to be covered than a $500 transaction when you are $100 overdrawn.

The bank also considers whether you have a pattern of overdrafting and then depositing money to cover it. If you consistently overdraft and then deposit funds within a day or two, the bank is more likely to keep covering you. If you overdraft and leave the account negative for weeks, future transactions are less likely to be covered.

This means overdraft coverage is not a may provide — it is a discretionary service. The bank can decline to cover a transaction even if your overdraft coverage is turned on, and they are not required to tell you why.

Frequently Asked Questions

Can I overdraft my Bank of America account if I do not opt in?

No. Overdraft coverage is opt-in only, meaning you must turn it on in your account settings or by phone. If you have not turned it on, transactions that exceed your balance will be declined. However, some account fees and interest charges can still cause your account to go negative even without overdraft coverage enabled.

Does Bank of America overdraft debit card transactions at other stores?

Yes, if overdraft coverage is turned on for debit card transactions. However, the bank treats signature debit transactions (where you sign or enter a PIN) differently from PIN-only transactions. Signature transactions are more likely to be covered. Transactions at merchants outside the United States may not be covered even with overdraft protection on.

How long does it take for an overdraft fee to show up?

Overdraft fees usually appear in your account within one to two business days of the transaction that caused the overdraft. However, the transaction itself may post to your account the same day or the next day, depending on when the merchant submits it to the bank.

What is the difference between overdraft coverage and overdraft transfer?

Overdraft coverage lets the bank cover transactions that exceed your balance and charges you $35 per overdraft. Overdraft transfer automatically moves money from a linked savings account to prevent overdrafts and costs $10 per transfer. Overdraft transfer is cheaper if you overdraft more than twice a year, but it only works if your savings account has money in it.

Can Bank of America close my account for overdrafting?

Yes. If your account stays overdrawn for 30 days or longer, Bank of America will typically close it and report the negative balance to ChexSystems. You will owe the bank the full negative balance, and the closure will make it harder to open accounts at other banks.