Can You Buy Things Online With a Savings Account?
Learn how to leverage your savings account for online purchases by understanding indirect methods and common payment solutions.
A savings account is a financial tool for depositing funds and earning interest, primarily for future use. While online shopping is widespread, a direct link between a savings account and online transactions is not typically available. Funds in a savings account can be used indirectly for online spending.
Understanding Savings Accounts and Online Transactions
Savings accounts store money and accrue interest, promoting financial growth over frequent spending. Their primary purpose is to help individuals save for significant purchases, emergencies, or long-term financial goals. Financial institutions structure these accounts to encourage saving by generally not providing direct payment mechanisms for immediate online transactions like checking accounts.
Savings accounts often have regulatory considerations regarding outgoing transactions. While a federal rule previously limited transfers and withdrawals to six per month, this requirement was suspended in April 2020. However, many banks and credit unions may still impose their own limits, and exceeding these could result in fees or account changes. This design encourages funds to remain in the account, emphasizing security and saving over transactional convenience.
Accessing Funds from Your Savings Account for Online Purchases
To use funds from a savings account for online purchases, the most common method involves transferring money to a linked checking account. This transfer can be initiated through online banking platforms, mobile banking applications, or at an automated teller machine (ATM). Once funds are moved to the checking account, they become accessible for online spending, often without transaction limits.
Another indirect approach uses a debit card linked to a checking account, funded by a transfer from savings. For specific online services or bill payments, obtaining a cashier’s check or money order from your financial institution using savings funds is possible, though less common for general online retail purchases. A cashier’s check is guaranteed by the bank and typically incurs a fee, ranging from a few dollars to around $15, and may require an in-person visit or an online order with a multi-day delivery timeframe.
Prepaid debit cards can also be loaded with funds, often by first transferring money from a savings account to a checking account, and then using that checking account to load the prepaid card. Some prepaid cards may allow direct loading at bank branches or through mobile check deposit features.
Common Online Payment Methods
Once funds are accessible, typically within a checking account, several direct payment methods are used for online purchases. Debit cards are a common option, linked directly to a checking account, allowing purchases by inputting the card number, expiration date, and the CVV. The transaction draws funds directly from the checking account, meaning purchases are limited to the available balance.
Credit cards are another widely accepted method for online transactions, providing a line of credit repaid later. They offer widespread acceptance, convenience, fraud protection, rewards programs, and dispute resolution services.
Online payment platforms, such as PayPal, Apple Pay, and Google Pay, serve as intermediaries, securely linking to bank accounts or credit cards to facilitate online purchases. These platforms enhance security by tokenizing payment information and allow for quicker checkout processes without directly sharing card details with every merchant.