Can you spend from a savings account?

A person putting money into their pants pocket

A savings account is one of the oldest and most popular banking solutions used by people to protect their money. The premise is simple: set aside your cash in the account and earn interest on the balance, making your savings grow over time. And though most savings accounts work the same way, interest rates and corresponding annual percentage yield (APY) vary between banks and accounts.

But how accessible is your money when you need it? Can you write checks from your savings account? Can you use it for online transactions? Can you take money out of a savings account using a debit card?

We’re sharing how you can spend from a savings account and what restrictions your bank may have to help you understand if a savings account is the right choice for your financial needs.

Key takeaways

Regulation D restrictions: You may be subject to withdrawal limitations depending on your financial institution’s policies with regards to Regulation D.

Transfer money: To avoid getting your savings account restricted, you can transfer money from savings to checking accounts and make your transactions there.

Take out cash: You can withdraw cash from your savings account using an ATM/debit card or by visiting the bank with a proof of your identity.

What's on this page:

  1.  Why are payments from your savings account restricted?

  2.  How to spend money from your savings account

Why are payments from your savings account restricted?

The Federal Reserve’s Regulation D affects how banks and credit unions classify different types of financial accounts. It was created to help banks maintain adequate reserves at all times by limiting the frequency of withdrawals that customers could make from savings accounts. According to federal law, you could be limited to six withdrawals per month from savings accounts without penalty. The types of withdrawals include:

  • Automated Clearing House (ACH) payments and electronic funds transfers (EFTs)

  • Bill payments deducted directly from your savings account

  • Debit card transactions

  • Overdraft transfers

  • Transfers via mobile apps or web portals

  • Personal or cashier’s checks made out to a third party

  • Wire transfers

If you exceeded this limit, you were liable to pay a fee based on the bank’s terms for your particular account. If you receive this penalty  regularly, banks will sometimes  convert your savings account into a checking account with a lower interest rate, or shut it down completely.

In 2020 Regulation D was amended because of the Covid pandemic. The interim rule allows depository institutions to stop enforcing the six transfer limit and to allow customers to make unlimited transfers and withdrawals from their savings accounts. Banks have the option to follow the amended rule but aren’t obligated to do so, and it currently remains their choice for which version of the rule to follow. 

It’s important to remember that saving accounts are not designed for frequent transactions and are intended to encourage saving. Some banks still choose to charge a fee for multiple transactions from a savings account to preserve the distinction between checking accounts and interest-bearing savings accounts. However, the updated ruling has made it easier for customers to access their savings deposits if needed.

How to spend money from your savings account

Savings accounts are intended for making deposits and accumulating funds for long-term goals. However, you can access and spend the money from your savings account. The easiest way is to transfer your money to a checking account.

An easy way to use the money is to transfer what you need for the month into your checking account, where you can make ongoing transactions without penalty. However, be sure to note if your savings accounts have any transfer limitations in place.

If you have a savings account through a platform like Raisin, setting up a withdrawal just takes a few clicks. The transfer to your external linked checking accounts can take between one and three business days. As soon as the transfer clears, you can withdraw your cash as you would typically, whether at an ATM or by visiting a branch and working with a bank teller.

Find the right savings account for your needs with Raisin

There are many options for savings accounts out there, each with different interest rates and withdrawal restrictions. So how can you decide which one is right for you?

Raisin is a one-stop destination to compare high-yielding savings products offered by U.S. financial institutions. With Raisin, you can access competitive interest rates on high-yield savings accounts and CDs from a range of federally insured financial institutions, all from the convenience of one account. Your interest or dividend is compounded daily and posted to your account at the end of each month.

It’s never too early to start saving for your future; sign up with Raisin today!

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