Can I Spend Money From a Savings Account?

Savings accounts are a safe and popular vehicle for stashing extra money, but they aren't intended to be cash machines. While it is possible to spend money from a savings account, there are several factors to consider before doing so.

The Bankrate Promise

Bankrate, a leading financial resource, advises that savings accounts are designed for saving rather than spending. They offer security for your funds and often provide a modest interest rate. However, using a savings account as a source of everyday spending can lead to a number of problems.

Why There Are Limits on Payments from Your Savings Account

Many savings accounts have monthly withdrawal limits to encourage account holders to save rather than spend. These limits help you avoid depleting your savings too quickly and losing out on potential interest earnings.

How You Can Spend Money from Your Savings Account

While savings accounts are not designed for spending, there are ways you can access the funds when needed:

• Withdraw Cash: You can visit your bank or ATM to withdraw cash from your savings account.
• Transfer Money: You can transfer funds from your savings account to your checking account and then use your debit card for purchases.
• Get a Cashier's Check: You can request a cashier's check from your bank using the funds from your savings account.
• Direct Debit: You can set up automatic payments for bills or other expenses directly from your savings account.

Bottom Line

While it is possible to spend money from a savings account, it is generally not recommended. Savings accounts are better suited for long-term savings goals and emergencies. It is important to consider the potential consequences and explore other account options for everyday spending.

Up Next

If you're looking for more information on managing your finances, check out our other articles on budgeting, investing, and retirement planning.

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Yes, You Can Spend from Your Savings Account. But Should You?

While you have the ability to spend money from your savings account, it is not always the best financial decision. Using a savings account for everyday purchases can sabotage your savings efforts and lead to a number of problems.

Savings Accounts Usually Don't Offer Debit Cards

Unlike checking accounts, most savings accounts do not come with debit cards. This makes it less convenient to use a savings account for everyday spending. Without a debit card, you would need to transfer funds to a checking account or withdraw cash before making purchases.

Many Savings Accounts Have Monthly Withdrawal Limits

To encourage saving, many savings accounts impose monthly withdrawal limits. These limits vary by financial institution but typically range from 3 to 6 withdrawals per month. If you exceed these limits, you may be charged fees or have your account converted to a checking account.

Using a Savings Account for Everyday Purchases Can Sabotage Your Savings Efforts

When you use a savings account for everyday spending, you risk depleting your savings and hindering your progress towards financial goals. It is important to have a separate account for spending and to prioritize building and maintaining your savings.

Pros and Cons of Using a Savings Account for Daily Purchases

Pros:

• Convenience: If you already have a savings account and need to make a purchase, it may be more convenient to use the funds from your account.
• Security: Savings accounts offer a safe place to store your money and protect it from loss or theft.

Cons:

• Limited Access: With monthly withdrawal limits and the lack of a debit card, accessing funds from a savings account for everyday spending can be challenging.
• Reduced Savings: Using your savings account for spending can decrease the amount of money you have available for emergencies or future expenses.

Other Account Options to Consider for Spending

If you find yourself frequently needing to spend money, it may be beneficial to consider other account options:

• Checking Accounts: Checking accounts are designed for everyday spending and often come with features such as debit cards and online bill payment.
• Money Market Accounts: Money market accounts offer a higher interest rate than traditional savings accounts and may provide more flexibility for spending.

So Should You Spend Money From Your Savings Account?

The decision to spend money from your savings account ultimately depends on your financial situation and goals. While it is possible to spend from your savings account, it is generally recommended to use other account options for everyday spending to preserve and grow your savings.

FAQs

Q: Can I use my savings account for online purchases?
A: While it is possible to make online purchases directly from your savings account, it is not recommended. Doing so could run afoul of banking regulations and compromise your savings goals.