Bank of America charges overdraft fees, but the amount and when they apply depend on your account type

Bank of America charges an overdraft fee when you spend more money than you have in your checking account and the bank covers the difference. As of the most recent update, Bank of America charges $35 per overdraft transaction on most checking accounts. However, the bank has changed its overdraft policies in recent years, and the specifics vary depending on whether you have a standard checking account, a premium account, or a student account.

The fee applies when a transaction posts to your account and your balance goes negative. Bank of America does not charge a fee for every negative balance — only for transactions that overdraw the account. This means if you go $5 negative and stay there, you pay one $35 fee, not a daily fee. However, if you make multiple purchases while overdrawn, each one may trigger a separate fee.

Bank of America also offers an overdraft protection option that links your checking account to a savings account or credit line. If you use this service, transfers happen automatically when you overdraw, and you may pay a transfer fee instead of an overdraft fee — typically $10 per transfer on linked accounts.

Key Takeaways

  • Bank of America charges $35 per overdraft transaction on standard checking accounts when your balance goes negative and a transaction posts.
  • The bank does not charge a daily fee for being overdrawn — only one fee per transaction that causes the overdraft.
  • Overdraft protection linked to a savings account or credit line can prevent overdraft fees by automatically transferring money, though a transfer fee may apply instead.
  • Bank of America allows a grace period on some accounts before overdraft fees kick in, so checking your account terms is important.
  • Student and premium checking accounts may have different overdraft fee structures or waived fees under certain conditions.

How Bank of America's overdraft fee is triggered

An overdraft fee occurs when a transaction posts to your account and brings your balance below zero. The key word is posts — not when you swipe your card or write a check, but when the transaction actually settles in your account. This timing matters because a transaction can be pending for hours or even days before it posts, during which your account may appear to have money even though it does not.

Bank of America processes transactions in a specific order, which can affect how many overdraft fees you pay in a single day. The bank typically posts transactions from largest to smallest within each category (debit card purchases, checks, ACH transfers), rather than in the order you made them. This means if you make a small purchase and then a large one on the same day, the large one may post first and trigger an overdraft fee, even though you made the small purchase first.

Once a transaction triggers an overdraft, you have a limited time to bring your balance back to positive before additional fees apply. Bank of America does not charge a continuous daily fee for being overdrawn, but each new transaction that posts while you are negative may incur another $35 fee.

Overdraft protection and transfer fees as an alternative

If you link your Bank of America checking account to a savings account, money market account, or credit line through overdraft protection, the bank can automatically transfer money to cover overdrafts. This prevents the overdraft fee from being charged in the first place. However, you will pay a transfer fee instead — usually $10 per transfer on linked savings or money market accounts.

The transfer fee is often cheaper than the overdraft fee, especially if you overdraw multiple times in a month. For example, three overdrafts would cost $105 in fees, whereas three transfers might cost $30. You can set a minimum transfer amount (typically $100) so small overdrafts do not trigger automatic transfers.

Overdraft protection is optional. If you do not enroll, the bank will still cover overdrafts and charge the $35 fee. Some customers choose not to use overdraft protection because they prefer to be declined at the point of sale rather than pay any fee.

Account types and variations in overdraft fees

Bank of America offers different checking accounts, and overdraft policies are not identical across all of them. A standard Checking Account charges the $35 overdraft fee. A Premium Checking Account (such as the Preferred Rewards tier) may waive overdraft fees if you maintain a higher balance or have a may have access to Bank of America relationship, such as a mortgage or investment account.

Bank of America also offers a Student Checking Account designed for customers under 24 years old. This account has different terms, including potential overdraft fee waivers or reduced fees depending on the specific promotion at the time you open it. You should review the current terms for the student account, as these change periodically.

If you have a Bank of America business checking account, overdraft fees and policies may differ from personal accounts. Business accounts sometimes have higher overdraft fees or different protection options, so check your specific account agreement.

What happens if you do not pay the overdraft

If your account remains overdrawn and you do not deposit money to cover it, Bank of America will eventually close your account and report it to ChexSystems, a banking history database. This can make it difficult to open a checking account at other banks for several years. The bank typically gives you a grace period of 30 to 60 days to bring your account current before closing it, but this varies.

During the overdrawn period, you may also incur additional fees. Bank of America charges a fee if your account stays negative for more than a certain number of days (usually around 60 days). Once the account is closed due to non-payment, you may owe the full negative balance plus all accumulated fees.

If you are unable to pay an overdraft, contact Bank of America directly to discuss your options. The bank sometimes negotiates with customers to waive fees or set up a payment plan, particularly if you have a long account history or if the overdraft was caused by an error.

How to avoid overdraft fees at Bank of America

The most straightforward way to avoid overdraft fees is to monitor your account balance regularly and keep a buffer of money you do not spend. Many people keep a minimum balance of $100 to $500 as a cushion. Bank of America's mobile app and online banking show your current balance and pending transactions, so you can see what is coming.

Setting up overdraft protection is another option. Link your checking account to a savings account, and the bank will transfer money automatically if you overdraw. You pay a $10 transfer fee instead of a $35 overdraft fee, which is cheaper if you overdraw more than once every three months.

You can also turn off overdraft protection entirely, which means transactions will be declined if you do not have enough money. This prevents fees but may be inconvenient if you need to make an urgent purchase. Bank of America allows you to opt out of overdraft coverage for debit card and ATM transactions specifically, while keeping it for checks and ACH transfers if you prefer.

Comparing Bank of America overdraft fees to other banks

Bank of America's $35 overdraft fee is in line with many large national banks. Wells Fargo and Chase both charge $35 per overdraft on standard checking accounts. However, some online banks and credit unions charge lower fees or no overdraft fees at all. For example, some online banks charge $25 per overdraft or offer accounts with no overdraft fees.

Credit unions often have lower overdraft fees than large banks, sometimes as low as $15 to $25 per transaction. If you are frequently overdrawn, switching to a credit union or an online bank with lower fees could save you money over time. However, you should also consider other account features, such as branch access, customer service, and minimum balance requirements, when comparing banks.

Some banks offer overdraft grace periods, where you have a day or two to bring your balance positive before the fee is charged. Bank of America does not widely advertise such a grace period on standard accounts, so you should check your specific account agreement or contact the bank directly to confirm what applies to your account.

Frequently Asked Questions

Can Bank of America reverse an overdraft fee?

Bank of America may reverse one overdraft fee if you contact them and explain the situation, particularly if it is your first overdraft or if the overdraft was caused by a bank error. However, the bank does not automatically reverse fees, and whether they will depends on your account history and the circumstances. Call the customer service number on the back of your card to request a reversal.

Does Bank of America charge overdraft fees on savings accounts?

Bank of America does not charge overdraft fees on savings accounts in the traditional sense. However, if you attempt a withdrawal that exceeds your balance, the transaction may be declined or you may face other restrictions. Savings accounts are not designed for overdrafts the way checking accounts are.

What is the difference between overdraft and insufficient funds?

Overdraft means the bank covered the transaction and your account went negative, resulting in a $35 fee. Insufficient funds means the transaction was declined because you did not have enough money, so no fee is charged. You can choose which option you prefer by opting in or out of overdraft coverage.

How long does it take for an overdraft fee to post to my account?

The overdraft fee typically posts within one to three business days after the transaction that caused the overdraft. You may see it pending before it officially posts. Check your account online or through the mobile app to see pending fees.

Can I set up overdraft protection on a Bank of America debit card?

Yes, you can link your checking account to a savings account or credit line for overdraft protection on debit card transactions. When you use your debit card and would overdraw, the bank automatically transfers money from the linked account instead of charging an overdraft fee. You pay a $10 transfer fee per transaction instead.