This is a great question. Many adults don’t even know there are major differences between checking and savings accounts.
Checking accounts are known as deposit accounts. This means money can be moved into and out of these accounts as many times as you want. Well almost, you can only take out money as long as there is money in the checking account. There generally are no limits on the ways money can move into and out of a checking account either.
When it comes to savings accounts there are federal limitations at play. Savings accounts are not deposit accounts. The purpose of a savings account is to hold money so it can earn interest over time. As a result the Fed uses regulation D to limit the types and frequency of transactions that can occur on a savings account.
You can still make deposits and withdrawals from your savings account. In fact, you can make as many deposits and withdrawals as you’d like at the teller window or at an ATM. Unfortunately, this freedom stops there.
You are limited to only six electronic transactions per statement cycle and only three of those can be used to pay or receive money from a third party. Even transfers between your checking and savings are limited by this rule. If you go over the six transaction limit, your bank can either freeze your account or charge you a fee for each additional transaction.
Best advice: Plan your transfers from checking to savings in advance to avoid account holds and fees.
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