Understanding Savings Accounts: Can You Write Checks From Them?

Savings accounts are a fantastic way to store your money securely while earning interest on your deposits. They are designed to help you grow your savings and achieve your financial goals. However, many people wonder if they can use their savings accounts for other purposes, such as writing checks. The short answer is no. Generally, you cannot write checks from a savings account.

Why Can’t You Write Checks From a Savings Account?

Savings accounts are not designed to be transactional accounts. Their primary purpose is to store money that you do not intend to spend immediately. Banks reward you for keeping your money in a savings account by paying interest on your funds. Since savings accounts are not meant for frequent transactions, you typically will not receive a checkbook or debit card when you open one.

Another reason you cannot write checks from a savings account is due to a federal rule called Regulation D. Before 2020, the Federal Reserve limited savings account transactions to six per month. Although the enforcement of this rule has been eased due to the pandemic, some banks still adhere to these limits. It is important to note that this limit does not apply to transactions made directly at an ATM or with a bank teller.

What Accounts Can You Write a Check From?

If you need to write checks for bills and other expenses, consider the following options:

Checking Accounts

The most straightforward option is to use a checking account. Many savers open a checking account alongside their savings account. Traditional checking accounts allow you to write checks, use a debit card for transactions and ATM withdrawals, and pay bills online.

There are various types of checking accounts that may benefit you more than a traditional one. For instance, if you tend to keep large balances in your checking account, you could earn money on your balance with an interest-bearing checking account. College and vocational school students may be eligible for a student checking account, which often waives maintenance fees and comes with perks tailored for students. Other specialized checking accounts include business, premium, rewards, and senior accounts.

Money Market Accounts (MMAs)

If you do not anticipate writing more than a handful of checks each month, opening a money market account could be a smart move. This type of account combines the benefits of savings and checking accounts. They usually earn higher annual percentage yields (APYs) than traditional savings accounts and enable you to make a limited number of checks or debit transactions.

However, you could incur fees if you exceed the transaction limit for checks, withdrawals, or debit transactions. According to November 2023 data from the Federal Deposit Insurance Corp. (FDIC), the average money market APY is 0.63%, but you may find yields between 1.55% and 4.40% through an online bank. By contrast, a traditional savings account earns 0.46% on average, as of November 2023.

Cash Management Accounts (CMAs)

Like money market accounts, cash management accounts enable you to earn interest on your savings and allow you to write checks and handle transactions like a checking account. However, you will not be able to open a CMA at a standard bank, as these accounts are only available through brokers and investment firms.

A CMA could benefit you if you keep a high balance because they typically provide higher interest rates. Additionally, these accounts could potentially provide higher FDIC insurance limits by distributing your funds across multiple partner banks.

How to Use a Savings Account to Make Payments

Although you cannot write a check from your savings account, you still have options to use your savings to cover payments:

Transfer to Your Checking Account

The safest and easiest way to tap into your savings is to transfer the amount you need to cover your monthly bills to your checking account. Then, you can use your checking account to make payments as needed throughout the month.

Use Your Savings Account

It is possible to pay bills from your savings account by entering your account and routing numbers into the payment form. Once processed, the funds will be taken from your account, usually without a hitch.

Get a Cashier’s Check

Another option to make payments from your savings account is to purchase a cashier’s check from your bank. A cashier’s check is one of the most secure forms of payment and is guaranteed by the bank or credit union that issues it. They will print your name as the purchaser and the name of the person or business you are paying in the recipient line on the check. The bank will cover the cashier’s check with your cash upfront or, in this case, a withdrawal from your savings account.

The Bottom Line

Typically, you cannot write checks from your savings account, as most banks do not allow it. They also do not 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. Consider using a high-yield savings account to earn larger yields on your savings deposits and a checking account to cover your bills and other spending. An interest-earning checking account could make sense, especially if you usually maintain a high balance.

It is also wise to set up automatic payments to ensure you never miss a payment. Remember, your payment history is the most important factor in calculating your FICO® Score, so having a process to pay your bills on time is worth it. Experian Boost® could also help your credit-building efforts by giving you credit for bills and expenses that do not typically appear on your credit report, such as your cellphone bill, home utilities, and even your rent.

For any mortgage service needs, O1ne Mortgage is here to help. Call us at 213-732-3074 to speak with one of our expert loan salespersons. We are committed to providing you with the best service and helping you achieve your financial goals.