Savings accounts are often pretty basic, as bank accounts go. Add money to one, and if you've got a high-yield savings account, you could see some pretty decent growth over time. And if your account is with an FDIC-insured bank (as it should be!), your money will be protected and waiting for you when you need it.
If you're paying for an expense using money from your savings account (say, booking flights and hotels for that sweet vacation you've been saving up for), you might wonder if you can just cut out the middleman and pay using your savings account directly. While it may technically be possible, it's not a good idea. Here's why.
How would making a payment using a savings account work?
When you make a payment from your checking account, you generally use one of a few different methods. You can write a paper check (how retro!), do a bank transfer using your routing and account numbers, pay with a debit card, or use a payments app that's linked to your account.
You may be able to access some of these payment methods using your savings account. If you're making a bank transfer payment, you may be able to plug in your savings account number and the bank's routing number, and enable the payment to be taken directly from the account. Similarly, you can link a savings account to a payments app and withdraw directly from it that way. And if you have a savings account that offers a debit card (not common!), you could make purchases with it.
So why not make payments out of your savings like this? Well, your savings account isn't really designed to be a payments account. As such, many banks still enforce limits of six convenient withdrawals per month (this harkens back to Regulation D rules). Go over that number and you could incur a fee or even have your savings account changed to a checking account. And when you provide your savings account number and your bank's routing number to an outside party, you could be putting your money at risk. It's a much better move to use a different payment method.
Use these payment methods instead of your savings account
Your checking account was designed to make it easy to pay bills! As mentioned above, you can write a check or whip out a debit card. In the case of utility bills or mortgage/rent payments, you can set up bank transfers using your checking account.
A credit card is another fabulous way to make payments. Your line of credit isn't linked to your bank account balance, so if something goes wrong and you lose your credit card or it gets stolen, you're not liable for fraudulent charges. It's an extremely safe payment method. Plus, a rewards credit card gives you the opportunity to earn cash back or points on purchases you were going to make anyway. Your savings account doesn't give you that.
And if you're paying for something like a travel booking, you could be using a travel credit card and earning even more. When I book travel using money I've saved, I make the booking using my travel credit card, and then transfer the money from savings to a linked checking account so I can pay off the credit card using that money -- rather than paying for it directly out of my savings.
Your savings account is special
Your savings account is a home for your emergency fund and also for money you're saving for an expense in the next few years. If you have money you'll be spending sooner rather than later (say, for this month's bills), it's best kept in your checking account so you have easy access to it. And if it's for a longer-term goal (such as retirement), consider investing it with a brokerage, because doing so over a long time window gives you the opportunity to grow your money substantially.
In a pinch, sure, you might be able to pay bills with your savings account. But as you can see, there are better ways to tackle those bills, and your savings account has its own special purposes.
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FAQs
Typically, you can't pay bills from a savings account. Savings accounts are for long-term storage, not short-term repeat transactions. They do not have an associated debit card or checkbook you can use to make purchases.
Can I pay bills out of a savings account? ›
Technically, you might be able to pay bills using your savings account, if you can do a bank transfer with your account number, use a debit card linked to your savings, or use a payment app. However, your bank might limit savings account withdrawals to just six per month.
Can you pay bills from a checking or savings account? ›
A checking account helps you manage your day-to-day finances, such as paying your bills, receiving direct deposit of your paycheck and withdrawing cash from an ATM. A savings account is a place to build an emergency fund or setting aside money toward a specific goal, such as an upcoming vacation.
Can you write checks or pay bills directly from an online savings account? ›
You typically can't write checks from your savings account, as most banks simply don't allow for it. They also don't issue debit cards with savings accounts for making payments or purchases. Your best bet for writing checks is to use your checking account to make payments quickly and safely.
Can you debit from a savings account? ›
While savings accounts typically don't offer a debit card, some come with an ATM card, making it easier for you to access cash from your savings when you need it. Savings accounts aren't meant for everyday spending. But when an emergency strikes, the option to withdraw the money you have saved at an ATM can be helpful.
Can I pay things from my savings account? ›
To pay bills from a savings account, you must provide your account information—including routing and savings account numbers—to the payee. They will then remove the money from your account. While this should process without a problem, it does give an external party access to your account.
Can you spend money out of your savings account? ›
Typically, yes — your money is yours. But a savings account is designed to discourage frequent transactional use and may carry monthly withdrawal limits. Exceeding these limits can incur fees, have your account re-classified or have it closed altogether.
Is it better to pay from checking or savings account? ›
Checking accounts are better for regular transactions such as purchases, bill payments and ATM withdrawals. They typically earn less interest — or none. Savings accounts are better for storing money. Your funds typically earn more interest.
Can I use my savings account as a checking account? ›
No, federal regulations prohibit customers from writing checks against their savings accounts. Additionally, while savings accounts can be accessed through an ATM or debit card, you cannot use the debit card to make purchases using the money in your savings account.
Can I pay a mortgage from my savings account? ›
Pay your mortgage with automated withdrawals
Choosing automated withdrawals pulled from your checking or savings account is another easy option to make sure you pay your mortgage on time each month. This means your lender automatically withdraws the mortgage payment from your bank account on a specific day each month.
You can't write a check from a savings account because that is not how they operate according to federal guidelines. You can save money and earn interest with a savings account, while a checking account allows you to write checks.
Can I buy a car with my savings account? ›
With a savings account, you'd normally need to transfer your money to a checking account first. With a money market account, you could write a check directly from that account when buying a car. If you want to lock in your interest rate, you can do that with a certificate of deposit (CD).
How much can I withdraw from my savings account? ›
Unless your bank has set a withdrawal limit of its own, you are free to take as much out of your bank account as you would like. It is, after all, your money. Here's the catch: If you withdraw $10,000 or more, it will trigger federal reporting requirements.
Can I use a savings account to pay bills? ›
Some banks and credit unions allow customers to set up direct debit to pay bills, such as a utility company or credit card issuer, from a savings account. You'll need to supply account information, including account and routing numbers, and once authorized, the billing company can withdraw funds directly from savings.
Can you make transactions from a savings account? ›
Savings accounts are intended for making deposits and accumulating funds for long-term goals. However, you can access and spend the money from your savings account.
Can I make a direct debit from a savings account? ›
Setting up direct debits or standing orders is a breach of savings account Terms and therefore all regular payments need to be on a current account to enable continued payment.
What happens if you pay with savings account? ›
Banks offer interest on savings accounts because they use those funds to give loans. While savings accounts are optimized for long term deposits, it is possible to make purchases with them. However, you may have to pay a fee or lose out on the interest rate for doing so.
What can't you do with a savings account? ›
You can use a savings account to build an emergency fund, save for large purchases, or set aside money for future needs. They're not good for regular transactions, however, as many are limited to six withdrawals per month, though you can withdraw as much as you'd like with each withdrawal.
Can you make ACH payments from a savings account? ›
ACH payments apply to checking and savings accounts and include direct deposits and recurring payments. Nacha, originally the National Automated Clearinghouse Association, oversees and governs the ACH Network. ACH payments work by “pushing” and “pulling” money between bank accounts.
