When Can You Take Money Out of a Savings Account?
Understand the varied factors that determine when you can access money from your savings account, including historical regulations, bank policies, and fund availability.
Savings accounts provide a secure place to store funds, designed for accumulating money, earning modest interest, and setting aside funds for specific goals like emergencies or future purchases. These accounts promote financial discipline by making money less immediately accessible than a checking account, which is built for daily transactions. While savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC), understanding their withdrawal rules is important for effective money management.
Understanding Savings Account Access
Accessing funds from a savings account can be accomplished through several common methods. Account holders frequently withdraw cash at automated teller machines (ATMs) using a linked debit or ATM card. This method requires entering a Personal Identification Number (PIN) and selecting the withdrawal option.
Visiting a bank branch allows for in-person withdrawals with a teller. This involves filling out a withdrawal slip and presenting valid identification. Electronic transfers also move money from a savings account to a linked checking account or other external accounts through online banking platforms or mobile applications. These digital transfers often occur instantly or within a single business day.
Federal Withdrawal Limitations
Historically, federal regulations imposed specific limitations on withdrawals and transfers from savings accounts. Regulation D, a Federal Reserve rule, traditionally limited certain “convenient” transfers and withdrawals to six per statement cycle for savings and money market accounts. This regulation distinguished between transactional accounts, like checking, and savings accounts, which were intended for less frequent access.
Transactions that counted towards this limit included online transfers, automatic payments, phone transfers, and debit card purchases from money market accounts. However, ATM withdrawals, in-person teller withdrawals, and transfers by mail did not count against this federal limit. In April 2020, the Federal Reserve suspended the enforcement of this six-per-month limit to provide greater financial flexibility during the coronavirus pandemic. While the federal requirement is no longer in effect, many financial institutions may still choose to impose their own similar limits or fees.
Bank-Specific Withdrawal Policies
Even with the suspension of federal withdrawal limits, individual financial institutions maintain the discretion to set their own specific rules for savings account access. Banks commonly impose daily withdrawal limits, which dictate the maximum amount of cash that can be withdrawn from an ATM within a 24-hour period. These limits range from a few hundred dollars up to $2,000, depending on the bank and account type.
Beyond daily cash withdrawals, banks may also set limits on electronic transfers, such as the maximum amount that can be moved to another account online or via mobile banking within a day. Some institutions may also apply monthly aggregate limits on certain types of transactions. Exceeding these bank-imposed limits or making an excessive number of transfers can result in fees, which vary by institution. Account holders should consult their bank’s account disclosures to understand any applicable fees or restrictions.
Funds Availability and Holds
Understanding funds availability is key when accessing savings, referring to the timing of when newly deposited funds become available for withdrawal. Banks place holds on certain deposits to mitigate risk and ensure the funds clear. The duration of these holds can vary based on the type of deposit, the amount, and the account holder’s banking history.
Direct deposits, such as paychecks, are available on the same business day they are received. Cash deposits clear immediately or by the next business day. For checks, standard hold periods allow banks to make the first $200 of a check deposit available by the next business day, with the remainder available on the second business day. Larger check deposits exceeding $5,525 or $6,725 can have extended holds, ranging from two to five business days or longer. Banks are required to notify customers if a hold is placed on their deposit.