Can You Take Money Out of a Savings Account? Rules and Tips

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• You can take money out of a savings account if you need it to cover an expense.
• Some banks permit only six withdrawals per month, though that limit is no longer federally mandated.
• If you make frequent withdrawals from a savings account, it may affect how much interest you'll earn.

A savings account is an ideal place to store money you don't need right now, while a checking account is better for managing your daily expenses. But when you're ready to take money from your savings account, it pays to be mindful of your bank's withdrawal rules.

Here's what you need to know about withdrawing money from a savings account so you can avoid fees.

Understanding savings account withdrawals

You can generally take money out of a regular savings account or high-yield savings account at any time. However, some financial institutions have withdrawal limitations.

Withdrawal rules on savings accounts

Savings accounts may have monthly transaction limits per federal rule Regulation D, which states that banks must penalize consumers for withdrawing from savings accounts more than six times per month.

However, the Board of Governors of the Federal Reserve amended Regulation D during the COVID-19 pandemic. Banks now have the option to enforce a six-per-month transaction limit, increase the withdrawal limit, or eliminate the limit so customers can make unlimited transfers and withdrawals from their savings accounts.

Why do some financial institutions impose a monthly transaction limit? They want to encourage customers to grow their money in savings accounts and manage expenses through a checking account. Checking accounts do not have monthly withdrawal limits, regardless of where you bank. It also benefits banks to have a monthly transaction limit on savings so they can maintain cash reserves.

Fees for savings account withdrawals

Some financial institutions will charge a fee for withdrawals that surpass their six-per-month withdrawal limit. This common bank fee is referred to as an excess transaction fee. It can cost up to $10 per transaction.

Methods for withdrawing money

ATM withdrawals on savings accounts

You can usually withdraw money from your savings account at an ATM. All you'll have to do is use an ATM card or debit card, and select that you want to take out money from a savings account.

Bear in mind that financial institutions have daily ATM withdrawal limits as well. That means you can only take out a certain amount of money from an ATM per day. If you use an out-of-network ATM, the ATM issuer and/or the financial institution may charge you a bank ATM fee.

Online transfers on savings account

If you use online banking, you can transfer money to your checking account. That way, you can use your account's debit card to access your money. Similar to ATM cards, debit cards also have daily maximum limits. You can only spend a certain amount from your debit card per day.

In-person withdrawals at a bank

If you bank with a brick-and-mortar financial institution and need cash, you could visit a branch to take out money from your savings account. You'll go to a teller, provide your account information, and tell them you want to take out money from your savings account.

Best practices for managing savings withdrawals

Frequent withdrawals can cause you to rack up fees, reduce the amount of interest you earn on your balance, and cause your financial institution to move your money to a checking account so you can access it without limitation.

Avoid paying bills from your savings account, as transfers are considered withdrawals, and make sure you know when your statement date is so you can time your withdrawals carefully.

Savings account withdrawals FAQS

You can generally withdraw money from a savings account at any time, though you may be charged a fee if you exceed your financial institution's monthly withdrawal limit.

If your bank or credit union imposes a monthly limit, such as six withdrawals or transfers per month, you may be charged a fee of up to $10 for each transaction over that limit.

You can access your money at an ATM, in-person at a branch location, or by initiating an online transfer to another bank account.

If you exceed the maximum number of withdrawals allowed by your financial institution in a given month, you may be charged a fee for each withdrawal. If you repeatedly exceed the limit, your bank may move your money to a checking account, which allows unrestricted access to your money.

Savings accounts, particularly at online banks, tend to offer higher interest rates than checking accounts, enabling you to safely grow the cash that you don't need to access on a daily basis.

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Reference

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