There’s nothing fun about opening your checking account, and realizing you don’t have enough money in it to cover your expenses. And when you find yourself in this situation for the first time, your first question will likely be, can I transfer money from savings to checking?
Yes, you can transfer money from a savings account to a checking account. Though, as per Regulation D set forth by the Federal Reserve, you may only make six ‘convenient’ transfers per month. This includes any transfers that are pre-authorized, automatic, or initiated by telephone, computer or fax.
So, now you know it is possible to make transfers from savings to checking, but how do you do it? Is it a good idea? And, what are a few legitimate reasons to transfer money from savings to checking? These are all great questions, because when you start down this path, it can be a bit of a slippery slope. And that is the original reason I decided to write this post.
I mean, this is a personal finance blog after all, and we want you to save and invest as much money as possible. So, for the rest of this article, we are going to dive much deeper into the idea of transferring money out of savings.
Let’s get started.
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How To Transfer Money From Savings To Checking?
These days, the process of making money transfers is about as simple as can be. In most cases — assuming both accounts are held with the same financial institution — you can just log into your account online, and transfer money from one account to another.
However, if you are new to this, or are just uncomfortable with the process, you can always just walk into your local branch and ask a teller to do it. Just tell them which account you will be withdrawing money from, and which account you want it deposited.
The best part about this method is that it will not count toward you maximum of six transfers per month. Why? Because initiating an in-person transfer does not count as ‘convenient.’
How Long Do Bank Transfers Take?
Bank transfers usually take between one and three days. This timeline depends on the amount of money being transferred, and whether or not both accounts are held at the same financial institution.
Can I Send Money To Someone Else’s Bank Account?
Yes. These days you have a number of options when you want to transfer money to somebody else. For example, you can use an app like Venmo to send money, or you can transfer the money through PayPal. Additionally, many financial institutions will allow you to send money using Zelle.
Or, you can just do it the old-fashioned way by either writing them a check or paying them cash. It’s really up to you.
Is It A Good Idea to Transfer Money From Savings To Checking?
In general, we don’t recommend transferring money out of savings. After all, the entire point of saving money is to keep yourself from spending it. And, the moment you pull it from your savings account, the chances it will return are slim to none.
That said, pulling money out of savings does make sense in a number of situations. I mean, what’s the point of saving money if there isn’t a single situation when it is ok to use it?
For the next portion of this post, I want to cover 5 legitimate reasons to use the money in your savings account.
1. Emergency Expenses
The first, and most important to save money is to cover unexpected, emergency expenses. Now, let’s get one thing straight, if you are shopping and find something you really want to buy, that does not qualify as an emergency.
Rather, a few good examples of emergency expenses would be: unexpected medical bills, unforeseen car repairs, visiting a sick family member that lives across the country, a broken-down furnace in the middle of Winter. In other words, actual emergencies.
2. Buying A House
There are more reasons to save money that protecting yourself in case of an emergency. In fact, one of the best reasons to save money is to build up a down payment for a house, or to purchase a home outright.
If you have been saving to purchase a home, it is ok to pull money from savings as long as it goes toward the original purpose.
3. Buying A Car
Here at Be The Budget we never recommend financing a vehicle. In fact, we aren’t really fans of any kind of debt. So, if you are going to buy a car, you should save for one and buy it outright.
Sure, it might take awhile. And, you may not be able to purchase the car of your dreams, but it will serve your financial life much better in the long run.
If you have been saving to purchase a car, you will need to transfer the money from savings to checking. That way, when you are negotiating price, you can just write a check and drive away.
Side Note: A car dealership may require a cashier’s check in order to purchase a car. For more on this, be sure to read our post: Do Car Dealerships Accept Cash?
4. Pay Off Debt
One of the best things about personal finance, is that the math is pretty simple. If you are making less than 1% interest on the money sitting in your savings account, and you are paying off debt at a much higher rate, it makes more sense to use your savings to pay off debt.
Just be sure to leave yourself at least $1,000 to $2,000 in case of emergencies.
Otherwise, paying off debt is a perfectly legitimate reason to transfer money from savings to checking.
5. Major Life Event (That You’ve Been Saving For)
Life is full of big celebrations and events. And at any one time, you should be saving for them.
For example, my wife and I just had a baby, and had to transfer about $1,000 from savings to pay for her hospital bills. (Please note, having a baby is not an emergency. So the money should come from a new baby savings account, not your emergency fund.)
Additionally, this means about 18 years from now we are probably going to have a few college tuition bills to pay. Around that same time, she may have met the boy of her dreams, so we might also be shelling out a chunk of change for her wedding. Long story short, saving for those two events is high on our priority list.
Life events are worth saving for. And when they roll around, it is ok to spend the money you saved up to pay for them.
Transferring money from savings to checking is not only possible, it is common. In fact, there are many situations where it makes great sense to do so. Whether you are paying for a major life event, a down payment on a house, a new car, or an emergency expense, knowing how to transfer money is an important part of personal finance.
Just don’t go crazy.
Remember, the point of a savings account is to save money, not spend it.