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My paychecks get directly deposited into my checking account, and I haven't bothered to move any of it into my savings account because I know there are some drawbacks to having it in savings as opposed to checking where it's readily accessible. What has to be considered when moving money from checking into savings? Can arbitrarily large amounts be moved between the two or does it somehow kind of get locked up once it's in savings?

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I know there are some drawbacks to having it in savings as opposed to checking where it's readily accessible.

There's one minor drawback: Federal Reserve Board Regulation D, the six withdrawal per calendar month limit (which has been suspended since the COVID outbreak). With a smidgen of forethought, it's trivially easy to work around.

What has to be considered when moving money from checking into savings?

"How much do I want to move into my savings account?" That's it...

Can arbitrarily large amounts be moved between the two?

Yes.

In the US:

  • Intra-bank: checking and savings account at the same bank. I don't recommend this, unless you already bank where the savings account APY is "high".
  • Zelle, PayPal, Cash, Venmo, etc: somewhere around $2500/day and $5000 total per month. It varies by service.
  • You can "only" transfer $25K per day (for free) using ACH; it can take up to three business days, though.
  • Larger amounts require "wire" transfer, which are immediate, and cost money.

or does it somehow kind of get locked up once it's in savings?

LOL no. Where did you get that idea?

EDIT: #1: Savings are not investment; they are savings. #2 Even though banks lend money out, they do not lend out all the money; a healthy fraction must remain in the bank, so that there's enough cash on hand for expected and unexpected withdrawals. (This is called fractional banking.) (This was true until last year; a very bad decision, IMO.)

EDIT 2: what really locks your money up are CDs (whether as IRAs or plain old taxable ones). Of course, your money is never 100% locked up; you just might have to pay a fee/penalty to get to it.

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    FWIW, I've been doing it for as long as I've had online banking, and perhaps before - it's been so long that I honestly don't remember. All income, whether direct deposit, transfer, or actual checks, goes into checking. If checking grows beyond the amount needed for ongoing expenses, it gets moved to savings. If income doesn't exceed outgo (which sometimes happens, alas :-() money gets moved back to checking. And if savings gets to be more than several months expenses, a chunk gets moved to checking, and from there to mutual funds. Never had problems.
    – jamesqf
    Aug 4 at 4:52
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    @MoneyNinja see my edits. Note also that savings (and checking!!) accounts are "on a different axis" than IRA accounts. (Think of the X and Y axes of the Cartesian coordinate system.) Thus, you can have a savings account which is an IRA (although it's a stupid idea).
    – RonJohn
    Aug 4 at 5:24
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    @MoneyNinja see my second edit.
    – RonJohn
    Aug 4 at 5:27
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    @MoneyNinja no lines; just a bunch of discrete dots. If that's a bad example, then think of "the way it makes money" and "tax status" as columns: choose one from column A, and one from column B.
    – RonJohn
    Aug 4 at 5:43
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    Your edit #1 is untrue, at least in the US. Last year the Federal Reserve lowered reserve requirements at US banks to zero (q.v. federalreserve.gov/monetarypolicy/reservereq.htm ). When banks have withdrawals that exceed cash on hand, they normally just borrow what they need from other banks, or they sell sell some of their assets. As long as the bank is solvent, it's really not a problem.
    – Nobody
    Aug 4 at 12:25
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You have a savings account without any forethought. That tells me you have the very typical situation of a bank providing a bundle of a checking and savings account. So I presume they're at the same bank, which is fine. *

Transfers between checking and savings will be a trivial matter. It will not require Zelle nor a wire transfer nor an EFT. For instance my bank has a UX specifically for transfers amongst your own accounts. You can do it at the ATM machine, and it has no limit. (But weirdly, you can't access that UX on the web or app). Because it is very low risk, it is lower security as well - for instance allowing it via their phone banking system, which is limited to things like this.

This type of savings account differs only in trivial ways. It may pay a tiny amount of interest in the savings. It can't be bound to a debit card. You can often do EFT withdrawals e.g. to pay credit cards. It is clearly the same basic sort of account, just with a switch flipped on a couple of features.

It is mostly there for you to use as a planning tool. It allows you to think of the money in checking as being for spending, and the money in savings as being for, well, saving for a rainy day. That can be very helpful for some people to visualize their money that way.


* They are just one "bucket" with 2 sub-buckets inside. Any bank deposit insurance such as FDIC will limit your insurance per bank, not per account, but that's only a problem when you have a fortune in there.

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  • Correct, I am talking about savings and checking accounts from the same bank. Is it nothing more than just a conceptual tool? Doesn't the money in savings grow due to interest as opposed to checking?
    – JSNinja
    Aug 4 at 16:24
  • @MoneyNinja Only because they have interest turned on, on the savings account. I bet they also offer interest-bearing checking accounts, where they flip the switches on for "interest", "bind to debit card" and "accept paper cheques". Aug 4 at 16:27

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