Depending on the bank you use, your savings account may have a monthly withdrawal limit. In the past, all savings accounts had a limit of six "convenient" monthly withdrawals due to Regulation D, a banking regulation put in place by the Federal Reserve. "Convenient" refers to the type of withdrawal, with examples including online and phone transfers.
The Fed got rid of this monthly withdrawal limit in 2020. That means there's no longer any government regulation on how many monthly withdrawals you can make from your savings account. However, some banks still have their own limits in place.
Most banks that have savings account withdrawal limits set the limit at six per month. But some set it even lower. You can find out whether your bank has a withdrawal limit and the penalties for breaking it in your account's terms. To give you an idea of what to expect, here are the potential consequences if you exceed your savings account's monthly withdrawal limit.
The bank could charge you a fee
The most common penalty in this situation is an excess withdrawal fee. This generally ranges from $3 to $15, depending on the bank, and it's charged per excess withdrawal. For example, let's say your bank charges a $10 fee for withdrawals in excess of six per month. If you make nine withdrawals that month, that's three fees for a total of $30. Certain banks have a maximum number of excess withdrawal fees they charge monthly.
The withdrawal could be declined
It's also possible that instead of charging you a fee, your bank will simply decline the transaction. This could be inconvenient, especially if you really need the money. In that case, the best option is to contact customer service, explain the situation, and see if there's a way that they can help you put through the withdrawal.
It may convert your account to a checking account
Some banks reserve the right to convert your savings account to a checking account due to excess withdrawals. With these banks, the terms usually state that the account could be converted if you repeatedly go over your account's withdrawal limits. It's not something that's going to happen right away, so you don't need to worry if you make a mistake one time.
It may close your savings account
The most extreme penalty is the bank closing your savings account entirely. This is rare, but there are banks that reserve the right to do this for excess withdrawals. Once again, banks normally only take this measure if you repeatedly exceed the withdrawal limits for your savings account.
Make sure you know the rules for your savings account
Withdrawal limits on savings accounts can be frustrating, especially since they're not legally required anymore. But these relics from another time have still stuck around with some banks, so it's important to watch out for them. Here's what to do:
- First, check if your savings account has a monthly withdrawal limit.
- If it does, make a mental note (or an actual note) of that limit, and also review what your bank considers a "convenient" withdrawal that counts toward it.
- Keep track of your withdrawals each month to avoid going over the maximum you're allowed.
If you find yourself coming up against that limit often, it's probably time to reconsider either the savings account you have or how you're using it. There are savings accounts, including excellent high-yield savings accounts, with no withdrawal limits. You could switch to one of those.
Keep in mind though that savings accounts aren't exactly intended for moving money around frequently; checking accounts are the better option for that. Consider keeping more money in your checking account, ideally enough to cover about one month's worth of expenses. Make sure your paychecks get deposited to your checking account, as well. If you do that, you shouldn't need to tap into your savings account more than once or twice per month.
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FAQs
But you will still want to be careful about the number of transfers you make. If there are too many excessive withdrawals, financial institutions reserve the right to convert the savings account into a checking account (that may not earn interest) or even close it.
What happens if you go over your withdrawal limit? ›
Some banks limit the number of withdrawals you can make from your savings account per month. If you exceed the limit, your bank could charge you a fee or decline the transaction. Repeatedly going over the withdrawal limit could lead to your account being converted to a checking account or being closed entirely.
What happens if you withdraw from savings too many times? ›
What Happens When You Exceed the Limit on Number of Withdrawals? If you occasionally exceed the limit of the number of withdrawals, your bank may decline your excess transactions or charge you a fee. If you exceed that limit often, some banks may convert your savings account to a checking account or close the account.
What does exceed withdrawal limit mean? ›
This error means that the transaction will bring your bank balance below the limit set by your bank or you have exceeded your transaction limit for the day. What can you do about it? You need to reach out to your bank to find out what your minimum account balance can be or to increase your limit.
Is there a limit to how much you can withdraw from a 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.
Do you get flagged for withdrawing too much money? ›
If you withdraw $10,000 or more, federal law requires the bank to report it to the IRS in an effort to prevent money laundering and tax evasion. Few, if any, banks set withdrawal limits on a savings account.
What happens if you withdraw more money than you have? ›
Withdrawing more than your account contains is called an overdraft. Bank overdraft services generally allow your transaction to go through, but you will be charged a fee.
How much can I withdraw from my savings account in a day? ›
The majority of the Indian banks' withdrawal limit per day ranges between Rs. 20,000 to Rs. 50,000 from an ATM. In addition, the maximum ATM withdrawal limit per day depends on your account type and banking specifics.
Can you put too much money in a savings account? ›
In the long run, your cash loses its value and purchasing power. Another red flag that you have too much cash in your savings account is if you exceed the $250,000 limit set by the Federal Deposit Insurance Corporation (FDIC) — obviously not a concern for the average saver.
Why can I only withdraw 6 times from savings? ›
What is Regulation D? Regulation D (12 C.F.R. 204) is a Fed rule that does not allow more than six certain types of withdrawals and transfers from a savings or money market account each statement cycle. This rule was enacted to help financial institutions to maintain reserve requirements.
If for whatever reason you need more cash than ATM limits allow, there are a few ways you can get around it: Request an increase in your daily limit. Make a withdrawal in person at a bank branch. Get a cash advance with a credit or debit card.
How do I withdraw money if limit exceeded? ›
It means your bank has a limit on the amount of cash you can withdraw from an ATM in a single day, and you are trying to get more than that. If you need more cash, go to a branch of the bank and get it from a teller there.
What does "amount limit exceeded" mean? ›
Title. Exceeds Amt Limit. This message usually means you are trying to run a transaction that exceeds the security limits either on your account or on the customer's card. Try the transaction again. If you get the same message, ask for another form of payment.
What happens if I withdraw money from my savings account? ›
If you frequently withdraw money from a savings account, it could impact your savings. For instance, some financial institutions will charge a fee for withdrawals that surpass their six-per-month withdrawal limit. This common bank fee is referred to as an excess transaction fee. It can cost up to $10 per transaction.
How much money can you keep in a savings account? ›
So, regardless of any other factors, you generally shouldn't keep more than $250,000 in any insured deposit account. After all, if you have money in the account that's over this limit, it's typically uninsured. Take advantage of what a high-yield savings account can offer you now.
Can the bank ask why you are withdrawing money? ›
Withdrawals over $10,000 may trigger Anti-Money Laundering and Terrorism Financing red flags and cause the bank to ask questions about your cash. These should be pretty easy to answer and leave with your money. For withdrawals under $10,000 there is less reason for the bank to want to know why you want your own cash.
How do I get around my withdrawal limit? ›
To work around ATM withdrawal limits, you can call the bank and request a limit increase, adjust your withdrawal limits using the mobile app, get cash back at checkout or withdraw from a linked savings account. If your bank or credit union has bank branches, you can withdraw larger amounts by stopping by in person.
Does the ATM withdrawal limit reset at midnight? ›
Withdraw cash late at night: Because ATM withdrawal limits often reset at midnight local time, you may be able to double dip if you time your transaction right. For example, you could max out your daily ATM withdrawal limit right before midnight and then again right after midnight.
How much money is too much to withdraw? ›
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 withdraw $20,000 from ATM at once? ›
The majority of the Indian banks' withdrawal limit per day ranges between Rs. 20,000 to Rs. 50,000 from an ATM. In addition, the maximum ATM withdrawal limit per day depends on your account type and banking specifics.
