You usually can’t get a debit card for your savings account. This is in part due to Regulation D, which limited the number of times you could withdraw from your savings account. Despite this, there are several other ways you can make payments using the funds from your savings.
It’s easy to get distracted by products you want when shopping for things you need. Maybe it’s something small you really want at that moment, like a candy bar or a new notebook you swear you’ll fill up this time. However, other spontaneous desires are more expensive, and you may not have the money on your debit card to buy them. But can you use that debit card to access your savings account as well? Is it possible at all to have a debit card that can link to your savings account?
Unfortunately, the answer to this is most likely no, as most savings accounts do not offer debit cards that are directly linked. This is for a variety of reasons, such as limited transactions and higher interest rates meant to encourage account holders to actually save money. However, there are other options available, like savings accounts that will offer ATM cards as opposed to debit.
Let’s dip our toes into the wonderful world of bank accounts and their associated cards and transaction rules.
Why can’t you get a debit card for most savings accounts?
The main reason that debit cards are rare for savings accounts is due to federal regulations. Regulation D of the Federal Reserve Act stipulates that banks must keep a certain amount of reserves in their bank.
The rules on bank withdrawals as well as the creation of the FDIC have their roots in the Great Depression. During the Great Depression, millions of people withdrew their savings after the stock market crash in 1929. This meant the financial institutions needed to liquidate loans but failed in many cases. To keep this from happening again, the government enacted Regulation D.
Part of this legislation limited withdrawals from accounts like savings accounts and money market accounts. The law, for most of its existence, stipulated that individuals should not exceed more than six transactions per month out of their savings accounts and or money market accounts. Thus, financial institutions followed suit and made a policy to reflect this. In most cases, this meant not offering debit cards for savings accounts to limit this type of transaction.
It’s important to note that, although these regulations were in place for almost 100 years, they changed in 2020. In April 2020, the Federal Reserve discontinued this transaction limit regulation.
That being said, many financial institutions continue to abide by the old policy loosely and do not offer debit cards for savings accounts. Some, however, may offer ATM cards that connect to a savings account.
Difference between debit cards and ATM cards
Most people will have either a debit card or an ATM card in their wallet. Although they all look very similar, there are some important differences.
- Debit cards. Debit cards act as a much more multifunctional card. You can withdraw money from an ATM, pay for things online, and pay for things in a shop by swiping or inserting it into a card reader. In some cases, vendors might require you to enter your PIN, but this isn’t always required.
- ATM cards. ATM cards are PIN-based cards with one, and only one, purpose: to withdraw money from a bank account like your checking and savings accounts. ATM cards can only be used to withdraw cash and not transact either in person or online.
How to access your money in a savings account
While it may be hard to find a debit card linked to your savings, there are several other ways you can access the cash stored in your savings account.
This is the simplest way to withdraw cash from your savings account. You can visit an ATM or stop by your local branch in person to withdraw your funds.
If you stop by your financial institution’s ATM where you have both a checking and savings account, you can choose which account to withdraw money from. Visiting an ATM from a different institution, however, may result in additional fees and limit which account you can withdraw from.
Luckily, not all savings accounts charge for ATM withdrawals. The accounts below all offer no-fee ATM transactions, making it even easier to access your money.
Cashier’s checks are checks that are pre-paid. Because the funds are guaranteed, this can be a great option for a large payment, such as a down payment or security deposit.
To get one, you can visit the financial institution you bank with and ask for a cashier’s check. When you list the amount the check is for, ask for the money to be withdrawn from your savings account. Keep in mind that most banks and credit unions do charge a fee for printing a cashier’s check.
If you prefer using your debit card for transactions, you can always transfer money from your savings account to your checking account. This can be one of the quickest options if you need funds quickly and don’t have access to an ATM.
You can either visit your institution’s branch and transfer the money in person or use a variety of online banking apps to do so. As long as you have both a checking and savings account with the same institution, this transfer is typically instant and does not incur additional fees.
Depending on the financial institution you bank with, you may be able to set up direct debit. This is a direct payment method you can set up to make your bill payments with money that comes directly from your savings account. To set up this payment system, you’ll need to provide your account information (including your account and routing number) to the appropriate billing company.
However, this may not be the best way to pay all of your bills. As we mentioned before, most financial institutions have withdrawal limits (either a number of withdrawals or the amount of cash withdrawn) for savings accounts, meaning every automatic payment would count towards that limit. Some institutions also only allow you to set up direct debit through your checking account or may not offer the option at all.
If you prefer to pay for some of your bills through your savings account, take a look at the below options. Each of these savings accounts offer free bill pay, allowing you to pay your bills and other automatic expenses directly through your account.
Could a money market account be a possible alternative?
Savings accounts encourage you to save your money, but they aren’t the only game in town. Many financial institutions will also offer other account structures for savings, such as money market accounts.
Money market accounts tend to offer a similar or even higher interest rate and higher annual percentage yield than most savings accounts. Even better, money market accounts have the accessibility and liquidity of a checking account.
However, it’s important to note here that money market accounts have more requirements than a traditional savings account. For instance, these accounts usually require you to maintain a minimum balance, which is substantially different from savings accounts. Furthermore, money market accounts often dictate a monthly premium you have to pay to maintain the account.
Therefore, for people with an excess amount of capital (i.e. cash), a money market account might be a good “best of both worlds” option. If you want the flexibility of a checking account and the interest of a savings account, then a money market account is the way to go.
Are savings accounts worth it?
Though savings accounts can seem like a hassle sometimes, keeping all of your funds in cash isn’t the best financial choice. First of all, you risk losing it, having it stolen, or ruining it with water or some other chemical substance. This is, in part, why checks (and then debit cards) became so popular.
In addition to those risks, the federal government insures a certain amount of money that is kept in financial institutions through the Federal Deposit Insurance Corporation (FDIC). The FDIC insures up to $250,000 per account type in an institution. This means that as long as you don’t exceed this $250,000 limit, then you are 100% insured by the federal government. Anything above that limit is fair game. However, you can keep your money in multiple banks and have several bank accounts with an insured $250,000.
NBA Superstar and 2-time MVP Giannis Antetokounmpo used to keep all of his millions of dollars in earnings in multiple banks across the U.S. in $250,000 increments. This is due to his impoverished upbringing in Greece and his fear of losing all of this new money when he once had none.
However, Marc Lasry, the owner of the Bucks, has since come out to say he advised him on some better strategies than keeping his money in 50 different banks.
Are a debit card and savings account the same?
No, a savings account and debit card are very different. A savings account is designed to encourage you to save money, sometimes with attached interest fees that help you earn additional money from your saved funds.
A debit card, on the other hand, is linked to your checking account. Acting as a replacement for checks and cash, a debit card transfers money from your account to that of whoever you’re purchasing something from.
Should you get an ATM card for a savings account?
It could be a smart idea to get an ATM card for your savings account depending on your spending habits. But remember that many institutions limit the number of times you can withdraw from your savings. If you plan on making frequent transactions using your savings account funds, an ATM card may not be the best option for you.
Does a saving account have a card?
Other than an ATM card, a savings account offered by a bank or credit union typically won’t have a card.
How much does it cost to get a debit card?
Most financial institutions will offer debit cards for free when you open a checking account. That being said, there are transactional fees associated with using a debit card.
- Savings accounts usually don’t offer debit cards.
- Debit cards are typically linked to a checking account and serve as a substitute for checks and cash. However, you can use an ATM card to access money in your savings account.
- You can also transfer money from your checking to your savings account, get a cashier’s check, or set up direct debit to make payments using your savings.
- Money market accounts are an alternative to both checking and savings accounts that act as a combination of both. However, these accounts are usually bound by a deposit and monthly service fees.
- People keep their money in savings accounts and checking accounts at banks because of the insurance offered through FDIC.
View Article Sources
- Learning Bank – Checking & Savings Accounts — Federal Deposit Insurance Corporation
- Savings Accounts Basics — Washington State Department of Financial Institutions
- Should I Open a Savings Account and Why? — SuperMoney
- Best Money Market Accounts | July 2022 — SuperMoney
- Best Savings Accounts | July 2022 — SuperMoney
- Best High-Yield Savings Account | July 2022 — SuperMoney
- Best Online Savings Accounts | July 2022 — SuperMoney
- Chime Savings Account — SuperMoney
- Porte Savings Account — SuperMoney