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.
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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
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 is the penalty for too many savings withdrawals? ›
If you make more than the maximum number of withdrawals from your savings account within a given month, you could face steep penalties such as: Withdrawal fees: Your bank may charge a fee for exceeding the six-per-month limit during a given month or statement period.
What does exceeds the 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.
What happens if you make more than 6 withdrawals from savings? ›
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.
Is there a limit on how much I can withdraw from my savings account? ›
If you have a savings account, you may be limited to no more than six "convenient" withdrawals or transfers per month from the account free of charge. If so, blame your bank, not the Federal Reserve. The Fed, which had long imposed this limitation on savings accounts withdrawals, lifted it in 2020.
What happens if you take all the 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.
What happens if I withdraw more than $10,000? ›
“Financial institutions are legally obligated to file a currency transaction report (CTR) for cash transactions exceeding $10,000,” he explained. “This reporting mechanism aims to combat money laundering and other illicit activities.”
What happens when you exceed your bank account 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.
How do I withdraw money if limit exceeded? ›
Withdrawing Cash at a Branch
You can also withdraw cash from your checking account at a branch if you've exceeded your daily ATM withdrawal limits. A teller can help you withdraw cash from a checking, savings or money market account.
What happens if you exceed your transfer limit? ›
If you exceed your transfer limit, the transaction might be declined. Additionally, some banks might charge a fee or temporarily freeze the account if they detect unusual activity.
By setting withdrawal limits, the bank can control how much they have to distribute at any given time. Just as importantly, if not more so, withdrawal limits are a security feature. By limiting daily withdrawals, banks help protect their customers against unauthorized access.
Is there a law on savings account withdrawal limit? ›
Under the revision to Regulation D announced in 2020, the Fed has loosened requirements for how banks treat savings deposits. Instead of limiting bank customers to six convenient transfers or withdrawals from a savings or money market account per month, Fed rules now allow for unlimited transfers or withdrawals.
What is the maximum withdrawal limit for savings bank? ›
It is generally set at a lower threshold than the account's total withdrawal capacity. This limit enhances security by minimising potential losses due to theft or unauthorised account access. For instance, a bank might cap ATM withdrawals at ₹25,000 daily.
What does exceeds withdrawal limit mean? ›
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.
Is there a penalty for withdrawing from savings? ›
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.
What is the maximum amount you can keep in a savings bank account? ›
How Much Money Can You Keep in Savings Account? There is no limit on how much money you can keep in a savings bank account. However, banks have a minimum balance requirement that needs to be maintained in your savings bank account. If you fail to do so, you need to pay a penalty.
How much money can I withdraw without being flagged? ›
That said, cash withdrawals are subject to the same reporting limits as all transactions. 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.
What is an excessive withdrawal fee? ›
Excessive Withdrawal Fee
Excessive withdrawal fees are charged on certain types of accounts when the number of withdrawals or transfers within a certain period, typically a month, exceeds the limit set by the bank.
Can I withdraw $20,000 from a bank? ›
The amount of cash you can withdraw from a bank in a single day will depend on the bank's cash withdrawal policy. Your bank may allow you to withdraw $5,000, $10,000 or even $20,000 in cash per day. Or your daily cash withdrawal limits may be well below these amounts.
