How much money can I withdraw from a savings account in the United States?

if you have one savings account, congratulations! This type of financial instruments will allow you keep your money safe and, at the same time, make it grow thanks to the application of compound interests. However, you should know that there is a limit to the number of withdrawals you can make per month. If you are wondering “how much money can I withdraw from a savings account in the United States?” Here we answer and advise you.

In the United States, this amount boils down to six monthly withdrawals, unlike checking accounts that are subject to almost no withdrawal limits. But what does the bank count as a withdrawal? Just about everything, from online money transfers to phone moves, utility bill payments and check writing.

If you exceed your savings account’s withdrawal limit from time to time, your bank may decline future transactions and even charge a fee. But If you frequently exceed this limit, you may the bank converts your precious savings account into a checking account or even decide to close it completely.

Note: Fortunately, there are other types of withdrawals that do not count towards this limit and here you will discover what they are.

Why is there a withdrawal limit on savings accounts?

First of all, you should know that the money in your savings account belongs to you.. Precisely this is the key statement that many consumers use to ask themselves: then, If the money is mine, why can’t I access it whenever I want? Well, by a federal law called Federal Reserve Board Regulation D.

And it is that, the banks operate under what is called a Fractional Reserve System. When you deposit any amount of money into your bank account, the bank uses that money for many other things, such as making loans to consumers, opening lines of credit, and making mortgage or student loans. The bank only holds a small fraction of what consumers deposit. This is how these financial institutions make money and it is the way that allows them to extend different types of loans and lines of credit to consumers.

Classifying and dividing the different classes of accounts helps the bank to maintain sufficient reserves in its possession. Checking accounts are designed to handle many transactions per day, week or month. The money in this type of account is constantly moving, either in or out. As a result, no additional protections need to be implemented to open and manage these types of accounts. In fact, the government doesn’t even require banks to keep money reserves in checking account balances.

How much money can I withdraw from a savings account in the United States?

What does Convenient Transaction mean and why are they important?

Savings accounts are designed to receive deposits and transfers, and thus earn interest. But this money cannot be moved through frequent but occasional withdrawals. For that reason, it’s a good idea to pay your bills from a checking account instead of using your savings account for this.

This limit of six movements per month applies to «convenient transactions» which, to give you an idea, are the following:

  • overdrafts
  • Debit card transactions
  • Draft checks payable to third parties
  • Electronic funds transfers (EFT or Electronic Funds Transfer)
  • Automated transfers through the clearing house (ACH or Automated Clearing House)
  • Transfers or wire transfers made by telephone, fax, computer or any electronic device

What transactions do not apply to the savings account withdrawal limit?

You can use savings accounts to pay large and occasional bills, such as paying for life insurance or property taxes. And while you’re only technically entitled to those six withdrawals per month, you can exceed this withdrawal limit in several ways:

  • Making a withdrawal at an ATM
  • Visiting the bank window in person
  • Asking the bank to send you a check for a specific amount
  • Transferring money from your savings account to your checking account through an ATM

These methods are considered “inconvenient” and do not count towards the limit of six withdrawals per month. However, banks may still charge you certain fees and commissions when you exceed those six withdrawals or transfers, even if some of these withdrawals you make belong to the group of inconvenient transactions.

How to avoid withdrawal limits?

In addition to using a checking account for most of your transactions, there are a couple of ways you can avoid Regulation D limitations. If you expect to use your savings account to make more than six transfers or payments in a given month, you we recommend make a large transfer from your savings account to your checking account. From there you can allocate the money to pay what you need when you want and without restrictions.

If you are already close to the limit, you can move more money from your savings accounts using any of the methods mentioned above.

Do not worry! In the bank, your money is safe

Does it get on your nerves knowing that the bank doesn’t have most of your money on hand? Well it shouldn’t. The office of Federal Deposit Insurance Corporation (FDIC) handles protect the money you deposit in your savings accounts.

In fact, it covers up to $250,000 per depositor and, of course, per institution. If your bank becomes insolvent, FDIC insurance will prevent your money from being lost. Think that if banks keep that 100% of customer deposits on hand at all times, it would be much more difficult for all citizens to obtain a loan to buy a car, a house or start a business.

In short, how much money can you withdraw from a savings account in the United States?

  • The savings account withdrawal limit is six withdrawals per month and applies to transactions such as overdrafts and transfers, bill payments and debit card transactions.
  • Some types of withdrawals, such as visiting an agency to request the money, do not count towards this limit.
  • The main reason for the limit placed on savings accounts is that banks only hold a small percentage of the funds deposited by consumers in reserve.
  • The federal government insures the money that savers deposit in the bank for up to $250,000 per depositor and institution.

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