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Can you spend from a savings account?

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Savings accounts are a popular, safe place for people to keep their extra cash. They pay interest based on your balance, which can help you grow your savings over time. Online banks are an especially good option as they often pay higher interest rates than those offered by brick-and-mortar banks.

One downside of keeping your money in a savings account is that it’s harder to access and spend your money. With few exceptions, you can’t spend money out of your savings account directly. Instead, you need to find other ways to access your money before spending it. Even then, financial institutions tend to limit the number of payments or transfers you can make from your savings account  during each account period.

Why there are limits on the amount of payments you can make on your savings account

The reason that you’re limited in your ability to make payments from a savings account is that they weren’t designed for frequent transactions.

Federal law backs up this idea. Regulation D, a banking regulation, historically limits the number of transfers or withdrawals from savings accounts to six or fewer per statement period. Certain transactions, like in-person or ATM-based withdrawals, don’t count toward this limit. If you make more than six transactions in a single statement period, your bank may charge a fee. Regular or excessive breaching of the limit could lead to your bank closing the account.

In light of the coronavirus pandemic, however, the Federal Reserve Board has given banks the option to suspend Regulation D, letting customers make unlimited withdrawals or transfers from savings accounts. Banks aren’t required to do this, but many have reduced restrictions to make it easier for their customers to access their cash in the face of the financial difficulty caused by the pandemic.

How you can spend money from your savings account

Even though savings accounts aren’t designed for frequent transactions, there are ways to access your money and ultimately spend it.

Get cash

Arguably, the simplest way to spend money in your savings account is to make a cash withdrawal and spend that cash.

You can visit your local bank branch and ask a teller to let you withdraw some money from your savings account. Once the money is in your wallet, you’re free to go to any store you’d like to spend it.

Many banks also make it easy to make withdrawals from your savings account using an ATM card. If you have a checking account with the same bank, your debit card usually gives you the choice to make withdrawals from your checking or savings balance.

Transfer money

If you’re on the go and can’t find an ATM or branch to visit, or simply prefer to avoid dealing with cash, you can also transfer money out of your savings account into your checking account. With most banks, you can do this easily through your phone without the help of a bank representative. As long as your checking and savings accounts are at the same bank, the transfers are typically instant.

Once the money moves from your savings account to your checking account, you can swipe your debit card to pay for any purchase you’d like to make.

Get a cashier’s check

If you visit your bank, you can request that the bank issue a cashier’s check for you. You can cover the cost of the check using funds in your savings account. Then, you can use that check to pay the person named on the check.

Direct debit

On rare occasions, you can set up direct debit to pay a bill from your savings account.

To do this, you’ll have to work with the company sending you the bill, like a utility company or a credit card issuer. When you go to set up direct debit payments, provide the information for your savings account. When you authorize a payment, the billing company can withdraw funds directly from your savings account. However, some companies will only do direct debit from checking accounts and some banks may block such transactions.

Generally, doing this is a bad idea. Keep in mind that these types of payments count toward the six transfers per statement limit. It’s easy to accidentally go over the limit if you start paying bills out of your savings. You also might not keep as close an eye on your savings account as you do with your checking account, which could lead to you having less money in the account than you need to pay your bills.

Bottom line

Ultimately, savings accounts weren’t designed for making frequent transactions. Instead, they’re best used as a place to store money for the medium- or long-term. It’s one of the many differences between checking and savings accounts.

If you need an account to make frequent transactions, consider opening a checking account. There’s no reason you can’t have a checking account for money you’ll need in the short-term and a savings account for money you can afford to set aside. In fact, savings accounts are a great way to keep some of your funds separate from your spending money, which can make it easier to build an emergency fund or save toward a goal.

Featured image by wavebreakmedia of Shutterstock.

Written by
TJ Porter
Contributing writer
TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from budgeting tips to bank account reviews.