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Guide to Savings Account Withdrawal Limits

Guide to Savings Account Withdrawal Limits
Melissa Brock
Melissa BrockUpdated April 22, 2023
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If you have a savings account, you may be limited to a certain number of withdrawals per month. In fact, some financial institutions impose a savings account withdrawal limit, and they could charge you fees if you exceed it. Read on to learn more about savings account withdrawal limits, the possible fees involved, and tips for avoiding withdrawal limits.

What Is a Withdrawal Limit? 

For years, the Federal Reserve limited certain types of withdrawals — known as “convenient transactions” — to no more than six a month for savings accounts. If a customer made more than six withdrawals from a savings account, their bank could charge them a savings withdrawal limit fee. This rule, called Regulation D (Reg D),  was lifted in 2020, during the pandemic, to help people get access to their savings as needed, and it has remained suspended since then. However, the Federal Reserve gave financial institutions the option of keeping the limit in place. So some banks and other financial institutions may still charge you if you go over six withdrawals from your savings account monthly.

Why Are There Withdrawal Limits?

Banks and credit unions must keep certain cash reserves, called reserve requirements, to be able to cover the withdrawals customers make. By limiting the “convenient withdrawals” customers made from savings accounts, Regulation D helped to ensure that banks had adequate reserves. Recommended: Checking vs. Savings Account Differences

What Are Convenient Savings Account Transactions? 

Financial institutions consider certain transactions to be  "convenient," including money transfers you make online, by phone, through bill pay, or by writing a check. Although Reg D is no longer in place, some banks may still place a limit on these transactions. Convenient savings account transactions include the following:
  • Overdraft transfers: linking your checking account to another account such as your savings account to prevent overdrafts if you have insufficient funds  
  • Electronic funds transfers (EFTs): funds that are electronically or digitally transferred to debit or credit your account
  • Automated clearing house (ACH) transfers: transfers made between banks or credit unions through the Automated Clearing House network, such as direct deposits and monthly recurring debit payments 
  • Transfers or wire transfers made by phone, wire, or computer 
  • Checks written to a third party: This is when a person you wrote a check to endorses it to a third party.
  • Debit card transactions 

Which Transactions Do Not Apply to the Savings Withdrawal Limit?

Some transactions are not considered convenient transactions under Regulation D, such as
  • ATM withdrawals or transfers (including transfers from your savings to your checking account)
  • In-person transactions at a bank or credit union
  • Calling your bank or credit union and asking for a withdrawal by check, which they would mail to you 
However, it’s best to verify withdrawal limit information with your bank. Some institutions have limits on the number of ATM withdrawals you can make that are separate from Regulation D rules, for instance. Recommended: How Many Bank Accounts Can and Should You Have?

Tips for Avoiding Withdrawal Limits 

By now, you may be wondering things like: How many times can you transfer from savings?  And, what is the savings account transfer limit? Here are some steps you can take so that you don’t have to worry about withdrawal or savings account transaction limits. 

Use Your Checking Account to Pay Bills 

By paying monthly bills through your checking account, you don’t have to make withdrawals from your savings account to cover them.

Make One Big Withdrawal Rather Than Multiple Smaller Ones

Instead of frequently hitting up the ATM for small amounts of cash, figure out in advance what you’ll need for the next couple of weeks, or even the entire month, so that you only need to make one or two withdrawals.

Use a Method That Doesn’t Have Limits

Whenever you can, make an in-person transaction at your bank (such as going to the bank teller) to get money when you need it, which shouldn’t count against your limit. But be sure to check with your bank first to make sure they have no limits on these types of transactions.

Consider Choosing a New Bank

If you have a bank that charges you when you go over certain limits, think about switching to another financial institution that doesn’t impose these fees. While you’re at it, you could also choose a high-yield savings account to earn more interest on your money.

Let Your Savings Grow

Only draw funds from your savings account when truly necessary. That way your money will be there when you need it.

What Is Regulation D and How Does It Help Users? 

While it was in place, Regulation D limited the number of transactions you could make with a regulation D savings account, which may have encouraged some consumers to save money rather than spend it.The lifting of Reg D also has benefits. For instance, now consumers can take money out of their accounts when they need to without paying fees. This gives them more flexibility with their money.Recommended: How Much Money Should You Have Saved at Each Age?

ATM Withdrawal Limits 

ATM withdrawal fees are not considered convenient transactions, so even under Regulation D, consumers could generally make unlimited ATM withdrawals from an ATM without penalty. However, some banks do place limits on ATM withdrawals, and they may charge you if you exceed the limit. Check with your bank for more information. 

What Happens if You Go Over the Limit? 

Not every bank charges withdrawal limit fees or excessive use fees. But for those that do, how much is the savings withdrawal limit fee exactly? You'll typically pay between $5 and $10 every time you go over the limit. Some banks may even convert your savings account to a checking account or close the account if you regularly exceed the withdrawal limits.If you'd prefer to avoid withdrawal fees, you can choose a bank that doesn't charge these fees or have savings account transfer limits.

The Takeaway 

Regulation D no longer imposes federal limits on savings account withdrawals. However, your financial institution might have its own policy on withdrawals from savings accounts, and they could charge you if you go over the limit. Check with your bank to find out what its specific rules are. If you’re looking for a new bank with no savings account withdrawal limits, Lantern can help. You can conveniently compare high-yield savings accounts in our online marketplace to find one with the best rate and terms for you.Compare savings accounts with Lantern.

Frequently Asked Questions

Is there a limit to the number of transfers I can make monthly?
Is it possible to avoid savings account withdrawal limit fees?
Does Regulation D lead to paying more bank fees?
What happens when you withdraw too often from your savings?
Photo credit: iStock/Mykola Sosiukin

About the Author

Melissa Brock

Melissa Brock

Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Her work has appeared on Yahoo Finance, Entrepreneur, Investopedia, The Balance, FinanceBuzz, The Journal of College Admission, MarketBeat, College Finance, Rocket Mortgage, LeverageRx, Benzinga, Morty, Ally, and more.
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