Whether Bank of America will let you overdraft $500
Bank of America will overdraft your account if you have overdraft protection turned on and sufficient coverage in a linked account, or if you have an overdraft line of credit. The bank does not automatically overdraft everyone — you have to opt in to overdraft coverage for debit card and ATM transactions, and the decision to cover a specific transaction depends on your account history and the amount.
A $500 overdraft is large enough that the bank may decline it even if you have overdraft protection. Bank of America's overdraft decisions are made transaction-by-transaction, and they consider your account age, recent balance history, and whether you have paid overdraft fees before. If your account is new or you have a pattern of overdrafts, the bank is more likely to decline a $500 transaction than a $50 one.
The bank charges $35 per overdraft transaction if they do cover it, and they may charge a second $35 fee if your account stays negative for more than five business days. Those fees stack quickly if multiple transactions post while you are overdrawn.
Key Takeaways
- Bank of America overdrafts debit card and ATM withdrawals only if you have opted into overdraft protection; checks and ACH transfers are covered automatically if you are overdrawn.
- A $500 overdraft is large enough that the bank may decline it even if overdraft protection is on, based on your account history and recent balance.
- Each overdraft transaction costs $35, and the bank charges an additional $35 fee if your account stays negative for more than five business days.
- Overdraft protection links to a savings account, money market account, or line of credit; if the linked account has no funds, the overdraft will be declined.
How Bank of America overdraft protection actually works
Bank of America offers two separate overdraft systems. The first is overdraft protection, which links your checking account to another account — a savings account, money market account, or a Bank of America line of credit. When a transaction would overdraw your checking account, the bank transfers money from the linked account to cover it. This transfer costs $10 per occurrence, not $35.
The second system is overdraft coverage, which is what most people mean when they say "overdraft." If you opt into overdraft coverage, the bank will cover debit card transactions, ATM withdrawals, and checks even if you do not have a linked account. Each covered transaction costs $35. This is the system that applies to a $500 withdrawal if you do not have overdraft protection set up.
Overdraft coverage is not automatic. You have to go into your Bank of America account online or call 1-800-432-1000 to turn it on. Many people think it is already on because the bank covers checks and ACH transfers automatically — but those are covered under different rules, not overdraft coverage.
What determines whether Bank of America will cover a $500 overdraft
Bank of America does not publish the exact formula it uses to decide whether to cover a specific overdraft, but the bank has stated that it considers account age, recent balance history, and deposit patterns. A new account with a $500 balance and no overdraft history is far more likely to have a $500 overdraft declined than an account that has been open for five years and regularly carries a $3,000 balance.
The size of the overdraft matters. The bank is more willing to cover a $50 overdraft than a $500 one, all else equal. If your account has never been overdrawn before, a $500 overdraft is a large first request and the bank may decline it to avoid risk.
If you have paid overdraft fees in the past six months, the bank may also be more cautious. Customers with a pattern of overdrafts are flagged as higher-risk, and the bank may decline larger overdrafts to prevent the account from going deeply negative.
The real cost of a $500 Bank of America overdraft
If the bank covers a $500 overdraft, you pay $35 immediately. That is the overdraft fee. If your account stays negative for more than five business days, you pay a second $35 fee — the "extended overdraft fee." If you stay overdrawn for longer, the bank does not charge additional daily fees, but you will owe both the $70 in fees plus the $500 you borrowed.
The math matters. Borrowing $500 for one week costs $35. Borrowing $500 for two weeks costs $70. A payday loan or credit card cash advance often costs less than $70 for the same two weeks, depending on your interest rate and how quickly you repay.
Bank of America also has the right to close your account if you repeatedly overdraft or if your account goes significantly negative. The bank does not have a published threshold, but accounts that overdraft more than once a month or that stay negative for weeks at a time are at risk of closure.
Alternatives to overdrafting $500
If you need $500 and do not want to risk overdraft fees, a few options exist. A personal line of credit from Bank of America charges interest but no per-transaction fee — you pay only for the money you use, and the interest rate is usually lower than overdraft fees if you repay within a few weeks. You can set one up online or by calling the bank.
A credit card cash advance costs a flat fee (usually 3 to 5 percent of the amount) plus interest, but the interest does not start accruing until the end of your billing cycle. A $500 cash advance with a 5 percent fee costs $25 upfront, which is less than a single overdraft fee.
A short-term loan from a credit union or online lender often has a lower interest rate than a credit card or overdraft. If you have a credit union account, call and ask about a small personal loan; many credit unions will lend $500 to members with minimal paperwork.
If you need the money for an essential expense and have no other option, overdrafting is cheaper than a payday loan, which can cost $15 to $20 per $100 borrowed. But overdrafting should be a last resort, not a regular way to manage cash flow.
How to turn overdraft protection on or off at Bank of America
Log into your Bank of America account online or on the mobile app. Go to Settings, then Alerts & Services, then Overdraft Protection. You will see a list of your accounts and the option to link a savings account, money market account, or line of credit to your checking account. Select the account you want to link and confirm.
To turn off overdraft coverage (the $35-per-transaction system), go to Settings, then Overdraft Coverage, and toggle it off. If you turn it off, the bank will decline debit card and ATM transactions that would overdraw your account instead of covering them.
You can also call 1-800-432-1000 and ask a representative to set up or remove overdraft protection. The phone line is open seven days a week, and the process takes about five minutes.
Frequently Asked Questions
Will Bank of America overdraft my account if I do not have overdraft protection set up?
Only if you have opted into overdraft coverage. Checks and ACH transfers (like bill payments) are covered automatically, but debit card and ATM transactions will be declined if you do not have overdraft coverage turned on. You have to actively turn on overdraft coverage; it is not the default.
What happens if Bank of America declines my $500 overdraft?
The transaction will not go through. If you tried to withdraw $500 from an ATM, the machine will return your card and show an error. If you swiped a debit card, the transaction will be declined at the register. You will not be charged a fee for a declined transaction.
Can I overdraft if I have a linked savings account with only $100 in it?
If you have overdraft protection set up, the bank will transfer the $100 from savings to checking, but it will not cover the full $500. The remaining $400 will be declined unless you also have overdraft coverage turned on. If overdraft coverage is on, the bank will cover the remaining $400 and charge you $35.
How long do I have to repay an overdraft at Bank of America?
There is no formal repayment deadline. The overdraft stays on your account until you deposit money to cover it. However, if your account stays negative for more than five business days, you will be charged a second $35 fee, and if it stays negative for weeks, the bank may close your account.
Does overdrafting hurt my credit score?
Overdrafting itself does not appear on your credit report and does not directly hurt your credit score. However, if your account goes to collections because you do not repay the overdraft, that will appear on your credit report and damage your score.