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I'm trying to decide the correct drill bit size for a hole I have to make to fit my thread.

I measure the (major) diameter of the threaded section as 0.5325 inches. The threads are not supposed to go into the plastic.

I looked at the chart provided by Bosch, and assuming I have a 9/16 thread, the drill bit size should be 31/64. I tried 31/64 drill bit and drilled a test hole to see if it fits and it did not. I don't have 33/64 bit, but I tried 1/2 inch and it barely fits.

What is the correct method to determine the drill bit size from the measured threaded diameter? Also, since I am drilling into plastic, what is the correct way to determine the correct pilot hole drill bit?

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If you don't want the threads to go into the plastic than you need a drill bit larger than 0.535". 31/64" and 1/2" are both too small. (That table is showing you tapping sizes, for when you want the threads to engage the material.) –  Henry Jackson Jul 19 '13 at 4:36
    
Simple answer: Not big enough? Need a bigger bit. :-) 0.535" is slightly larger than 17/32" -- I would go with a 9/16" (or 35/64 if you want a super-tight tolerance). You could also use 19/32" or 5/8", if your situation doesn't require any sort of tight tolerances. Pilot hole just needs to be smaller than your final hole -- I'd probably go with a 1/8" or 1/4" (about 1/4th to 1/2 the final diameter). The bit will naturally want to follow any smaller hole. –  Jacob S Jul 19 '13 at 14:54
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When you look up a chart of drill sizes, you want clearance sizes. As an example, this drill chart has the drill size used to create holes that will be threaded with a tap, as well as the larger size you would use to create a hole that will clear the given threaded fastener. It actually gives two clearance sizes for that. You might want to use the larger if those two sizes for non-precision work that has more than one fastener, otherwise you could end up with alignment issues between pieces, where the holes don't line up.

Here is a wikipedia table of the same thing.

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The correct method to determine the drill bit size from a measured threaded diameter is:

drill bit size = measured diameter + clearance

The amount of clearance depends on the project.

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