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- You can take money out of a savings account if you need it to cover an expense.
- Some financial institutions only permit six free withdrawals per month.
- If you make frequent withdrawals from a savings account, it may affect how much interest you'll earn.
Savings accounts are ideal places to store money you don't want to touch, while checking accounts are better for managing your expenses. That said, if you need to withdraw money from your savings, it's possible. You don't want to get charged an excess withdrawal fee, though.
Here's what you need to know about withdrawing money from a savings account so you can avoid fees.
Can you take money out of a savings account?
You can take money out of a regular savings account at any time. However, some financial institutions have free withdrawal limitations.
Savings accounts may have monthly transaction limits per federal rule Regulation D, which stated that banks must penalize consumers for withdrawing from savings more than six times per month. The Board of Governors of the Federal Reserve amended Regulation D during the COVID-19 pandemic. Banks have the option to enforce a six-per-month transaction limit, increase the withdrawal limit, or delete 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.
How withdrawals affect money in savings accounts
If you frequently withdraw money from a savings account, it could impact your savings.
For instance, 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.
Frequent withdrawals also affect the amount of interest you can earn on a savings account.
Sarah Wicker, manager for deposit account and IRA services at Georgia's Own Credit Union, says the interest you'll earn on an account is determined by your account balance. If your savings account is being used for transactions, your balance will become lower. As a result, you may not earn as much interest. If you have a tiered interest savings account, you could also drop to a tier that has a lower annual percentage yield (APY).
Ways to withdraw money from a savings account
If you need to take out money from your savings account, here are three convenient ways to make a withdrawal:
- Withdraw money at an ATM: 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. 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 fee.
- Visit a branch:If you bank with a brick-and-mortar financial institution, 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.
- Transfer money to a checking 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 to 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.
Savings account withdrawals FAQS
Can people take money out of your savings account?
Another person can only take out money from your savings account if you give them your private information, including your bank account number. To avoid debit card fraud, monitor your bank account transactions routinely.
Do you lose interest if you withdraw from a savings account?
The interest earned on your account is based on your account balance. If you withdraw money from a savings account, you may not earn as much interest as you would have if you kept all your money in the account.
Is there a savings account you can't take money out of?
You cannot take money out of traditional CDs without paying a penalty. One of the biggest differences between CDs versus high-yield savings accounts is that CDs don't let you take out money before their terms end.
Does pulling from your savings account hurt your credit?
No, taking out money from a savings account does not hurt your credit score.
Banking Editor
Sophia Acevedo is a banking editor at Business Insider. She is a banking expert, and has about three years of experience reviewing banking products and analyzing savings and CD trends.Sophia oversees Personal Finance Insider's banking vertical. She edits and writes bank reviews, banking guides, and banking, budgeting, and savings articles for the Personal Finance Insider team.Sophia joined Business Insider in July 2021. Sophia is an alumna of California State University Fullerton, where she studied journalism and minored in political science. She is based in Southern California.You can reach out to her on Twitter at @sophieacvdo or email sacevedo@businessinsider.com.Read more about how Personal Finance Insider chooses, rates, and covers financial products and services »Below are links to some of her most popular stories:
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