What Are the Withdrawal Limits for Savings Accounts?

A traditional savings account is an obvious place to store cash, and it’s generally considered to be the best place to store your savings for quick access. But it may not be as simple as you think: There may be some limitations on how often you can withdraw or transfer funds from your savings account. Here’s what you need to know.

Withdrawal Limits for Savings Accounts Today

Your bank or credit union can set a monthly limit on the number of transfers or withdrawals you can make from a savings account. Financial institutions can also limit the amount of money you can withdraw or impose a minimum monthly balance requirement. You may face fees if you reach any of these limits or go below the required minimum balance, and the fees may increase with each additional withdrawal you make from your account.

These limits stem from a federal rule known as Regulation D, which imposed limits on “convenient transfers”—a category that includes using your debit card, writing a check, overdraft-related transfers, bill payment, and other money transfers that are done online, by phone, or by fax. (See more about Regulation D below.)

These monthly limits do not apply to other types of transactions, such as withdrawals or transfers made at an ATM or inside a bank branch, or by bank check.

What Happens if I Hit My Savings Account Withdrawal Limit?

If you exceed your limit on savings account withdrawals, there are several potential consequences depending on your bank or credit union and how frequently you exceed your monthly limit:

• Withdrawal fees or excessive use fees
• Account restrictions
• Account closure
• Account change to one that does not earn interest

What if I Need Cash After I Hit the Limit?

If you’ve reached your monthly transaction limit and need to withdraw money from your account, you can use an ATM or visit a teller at a bank branch since these transactions do not count toward your limit.

To avoid this going forward, consider using a checking account for bill payments, cash withdrawals, and other routine transactions. Your savings account can be used to store money for emergencies or infrequent uses.

Additionally, since overdraft transfers from your savings account may count toward your transaction limit, consider utilizing features such as low-balance alerts for any accounts linked to your savings account.

What Was Regulation D?

Regulation D was a federal rule that, in part, restricted consumers from making more than six withdrawals a month from savings deposit accounts, which include savings and money market accounts (MMAs). Reg D’s intent was to encourage Americans to save money and protect bank reserves.

However, in April 2020 the Federal Reserve announced that it was no longer requiring financial institutions to enforce that limit. But even with that pandemic-era change, when consumers may have needed greater access to their money, some banks and credit unions still require customers to heed the limit or face consequences.

Transaction accounts, on the other hand, did not face similar restrictions under this rule. Checking accounts are a primary example of this type of account; they are intended for routine transactions such as paying bills and making purchases.

The Bottom Line

Adhering to Regulation D limits is no longer required, but some banks and credit unions may still enforce them on savings accounts. Read the fine print on your savings accounts or contact your financial institution to avoid any surprises when you’re trying to withdraw or transfer money. Any interest you earn can be negated by account fees or a change to an account that does not accrue interest.