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Can You Pay Bills Directly from a Savings Account?

When your only remaining option for making a bill payment is to use a savings account, find out whether you can do it at a moment's notice.

Sometimes when you’re in a financial crunch you’ll need to tap your savings account to pay your bills.

While you hope to avoid those situations, they’re exactly why you should have a savings account in the first place. It’s better to deplete savings than to go into debt.

If you do need to tap your savings to pay your bills, you may wonder whether you can pay the bills directly from your savings account. In short, you can.

However, it’s generally a bad idea to pay bills directly from your savings account. Learn the reasons that you should avoid doing so.

Savings Accounts Are Not Designed for Paying Bills

You should try to avoid using your savings account to pay bills directly.

Savings accounts are designed to serve as long-term storage for your extra money.

They aren’t intended to be used like a checking account to make payments to other people or businesses. This fact makes itself known in a number of ways.

Limit of six transactions per month

One thing that makes it clear that savings accounts aren’t designed for paying bills is their six-transactions-per-month limit.

Federal law requires that banks limit the number of withdrawals or transfers that can be made from a savings account to six per month.

You may not have heard of this limit before, and it’s understandable if you haven’t. That’s because this limit ignores in-person and ATM-based transactions.

You may make as many withdrawals you’d like each month so long as you do some in-person. This limit only applies to online and electronic transfers.

If you pay bills out of a savings account, it will be treated as an electronic transfer that counts towards this limit. If you make too many payments or transfers this way, you could run into issues.

Excess withdrawal fees

Excess withdrawal fees are the main way that banks enforce the six transaction per month limit.

Each time you make a withdrawal or transfer after the sixth, your bank must charge you a fee of some sort. Some banks keep this fee relatively low, but others charge $20 or more for each transaction.

You don’t want to pay more than you have to when you’re paying your bills, so avoid using your savings account to pay your bills.

Some banks are even more restrictive, charging excess transaction fees before the sixth transaction in a month. That makes it even harder to use their savings accounts to pay bills.

Savings Withdrawal Fees at Top U.S. Banks

Bank Savings Withdrawal Fee Maximum # Of Fees Charged Monthly
Bank of America $10 after the first 6 withdrawals (fee waived if you maintain $20,000 in account) 6
Chase $5 after the first 6 withdrawals (fee waived for Chase Premier Savings accounts with a balance of $15,000 or greater, or $25,000 or greater in Chase Business Premier Savings accounts) 6
Citibank Does not charge No maximum
U.S. Bank $15 after the first 6 withdrawals 6
PNC Bank $15 after the first withdrawal No maximum
Capital One $10 after the 6 allowed No maximum
TD Bank $9 after the first 6 withdrawals for Money Market/Savings accounts (fee waived for Savings Overdraft Protection transfers)

$3 after the first 3 withdrawals for Club Accounts
6
BB&T $3 after the first 3 withdrawals for Regular Savings accounts

$15 after the first 6 withdrawals for MoneyRate Savings accounts
No maximum
SunTrust $6 after the first 6 withdrawals for Select Savings, Personal Savings, and Essential Savings accounts

$15 after the first 6 withdrawals for Signature Money Market Savings accounts
6
Ally Bank $10 after the first 6 withdrawals No maximum
Union Bank $15 after the first 6 withdrawals No maximum
Wells Fargo $15 after the first 6 withdrawals 3
Regions Bank $3 after the first 3 withdrawals No maximum
Synchrony Bank No excess withdrawal fee No charge, but if this happens on more than occasional basis, the bank reserves the right to close the account for misuse
Santander Bank $5 after the first 6 withdrawals No maximum, plus if you repeatedly exceed these limits, Santander will convert your account to a non-interest bearing checking account
Discover Bank No excess withdrawal fee No charge, but if this happens on more than occasional basis, the bank reserves the right to close the account

No checkbook, debit card, or online bill pay

Another thing that complicates the process of paying bills out of a savings account is that they don’t offer the features you need to pay bills.

Savings accounts don’t offer checkbooks, so you can’t write a check and mail it to the company you’re paying.

You also won’t be able to use your debit card to make a payment. You may get an ATM card for your savings account but can’t use it to make purchases or send payments. Finally, banks restrict their online bill pay features to checking accounts.

If you want to combine the benefits of a savings account with these features, open a money market account.

They still have some of the restrictions that apply to savings accounts, like the six-transaction-limit, but they offer more flexibility in the form of debit cards and checkbooks.

How to Pay Bills from a Savings Account

Although it isn’t a great idea, it is theoretically possible to pay your bills out of your savings account.

For it to be possible, you’ll need to be able to pull the payment from your account with the billing company. You can’t use your bank’s bill pay service to push a payment to the billing company.

You will have to provide your bank account number and bank routing number to the billing company.

You’ll then have to grant permission to the billing company to take money directly out of your savings account. If you can do this, you can pay your bills out of your savings account.

Generally, it is safer to push payments from your bank than to pull payments from your account using your account with the billing company.

Pushing payments reduces the odds that the billing company will accidentally process your payment twice and pull too much money from your account.

It also means that any errors that occur are more likely to be your bank’s fault, making them easier to resolve.

Why It’s a Bad Idea

There are a number of reasons why paying bills from your savings account is a bad idea.

Meant for saving, not spending

The most obvious is that savings accounts are meant to be used for saving, not spending. You want to use your savings account to build up cash reserves that you can use in an emergency.

Paying your bills out of your savings account will deplete your savings rather than increase them.

The other issue is that paying bills out of your savings can set a bad precedent.

If you get too used to making payments out of your savings account, it may be harder to avoid spending your savings in the future.

You want to be able to differentiate between your checking and savings accounts mentally to be able to make the most of both.

Errors can drain your savings (temporarily)

Another reason to avoid using your savings account to pay bills is that errors can deplete your savings (at least temporarily).

When you go to pay a bill, it’s possible that you’ll accidentally enter the wrong number and send too much to the billing company.

It’s also possible that the bank or billing company will simply make a mistake and transfer too much money out of your account.

Both of these scenarios are bad if it happens to your checking account. You’ll have to go through the effort of correcting the error and getting your money back. It’s especially bad if the error causes you to overdraw your checking account since you’ll incur fees.

The problem is that these types of errors are even worse if you use a savings account to pay your bills. If your savings account’s balance is depleted by a mistake, you’ll lose access to those funds until they're recovered.

What if you need those funds for something else in the near future?

You'll have a cash flow problem that could cause more problems down the road.

Paying too many bills may be costly

As we discussed earlier, savings accounts are intended to be long-term storage of extra cash. They weren’t designed to be used for regular transactions, so banks charge fees if you make too many withdrawals or transfers.

People pay a lot of bills every month these days: cable, internet, student loans, rent, credit cards, subscriptions, and more all generate monthly bills. You might be paying a dozen bills every month without even thinking about.

Because savings accounts offer such a limited number of monthly transactions, it’s easy to hit the limit. If you do, you’ll have to pay a fee for every single transaction for the rest of the month.

You could wind up paying hundreds of dollars in excessive transaction fees if you use your savings account to pay your bills.

Forced account conversion

One little-known fact about savings accounts is that your bank can make changes to the account at any time. That includes changing the account from a savings account to a checking account, without your permission.

If your bank feels that you are treating your savings account like a checking account, it may convert it into a checking account.

The bank will base this decision on how many transactions you make each month, and what type of transaction they are. Paying a lot of bills each month can certainly result in your account being converted to a checking account.

When your account is converted, it may be converted to a checking account that charges monthly fees. Usually, there’s a way to avoid the monthly fees, but you have to jump through some hoops.

If your account is converted unexpectedly, you may not be ready to meet the fee-waiver requirements. In fact, you may simply be unable to depending on your financial situation, especially if the requirement is a large balance.

While this is uncommon, it’s worth being aware of. You definitely don’t want to have your savings account converted into a checking account. It could cost you a lot of money and you’ll definitely lose out on potential interest.

Conclusion

While it is technically possible to pay bills out of your savings account, it is a bad idea for a number of reasons.

Just take the time to transfer funds to your checking account and make the payment from your checking account.

Dealing with the headaches that paying from a savings account can cause is not worth it.