Do you pay your bills out of a savings or checking account?

[tvguy]

I remember you talking about your daughter before and bank accounts.

Why is she not aware of what I would probably call basic banking info?

She would have been advised on how many transaction she could do. I knew this when I was like 8 or 9 when I got my own savings account.

Judging from the responses, a lot of people had no idea about this restriction.

 

[tvguy]

What’s the point of having a checking account when you’re writing your checks from a savings account? What’s the point of having a savings account if you’re using it for expenses and not for savings?

Not writing checks out of a savings account. These are electronic transfers.

 

[Mackenzie Click-Mickelson]

Judging from the responses, a lot of people had no idea about this restriction.

And they probably opened an account a while ago, multiple people have mentioned it's been a long long time since they opened it,several before restrictions were put in place.

The idea of someone coming to their parents, in tears no less, because of a requirement of an account they opened gives a different impression than that of the other posters too. And I don't really say that to be mean in all honesty.

 

[tvguy]

And they probably opened an account a while ago, multiple people have mentioned it's been a long long time since they opened it,several before restrictions were put in place.

The idea of someone coming to their parents, in tears no less, because of a requirement of an account they opened gives a different impression than that of the other posters too. And I don't really say that to be mean in all honesty.

Well, she has the accounts for 10 years, and I can see her frustration that this came up after so many years without issues

 

[Toolulu22]

If I need extra funds, I transfer from Savings to Checking. But it all comes from Checking.

I went through my banking paperwork recently and noticed I’d only written out 10 checks in all of 2019- and a few were voided for EFT in a doctor’s office. I pay my bills online and didn’t know about the savings account rule, but my husband and I have several individual, joint and business accounts. I have my paycheck deposited into my individual Checking Account and move things around from there.

 

[Mackenzie Click-Mickelson]

Well, she has the accounts for 10 years, and I can see her frustration that this came up after so many years without issues

After so many years without issues? Was she withdrawling a lot before?

A savings account isn't meant to be withdrawn a ton of times as part of the intent into it. Was she confused on what type of account she had and thought it was just like a checking account?

The reason I mentioned my account when I was 8 or 9 is because at that age I fully understood the limits to the account, the daily required minimum balance, the interest rate and the amount of times I could withdrawl from it. It's not that I expect every kid to know that, especially if their parents set up the account when they were way to young to even remember but if she's had the account for 10 years she was probably of an age to understand basics to the account and as you age that's going to be on you to know. If I didn't know about things I would say that's on me, my bad for not knowing.

When I think of things that trip people up it's usually things like overdraft fees increasing, service charges to accounts that didn't used to be there or increasing in the service charge, the financial institution converting your account to a different type that may have different terms and conditions, etc.

I've been with my bank for nearly 14 years. They've converted my account several times, I still have an old account that I don't want them to convert but it comes with service fees now, my credit card with them was converted to a rewards cash back card automatically. Now that stuff was sent to me in notices or my online account and that can more easily get buried. My husband and I have had the Money Market account for nearly 7 years now and I do remember when signing up for the account the stipulations on it though. If I didn't know though about what stipulations come with it I can go onto my Mobile Banking account and find out though. Does she use Mobile Banking or the like to go into her account to look at the rules regarding her accounts?.

 

[rigs32]

Not writing checks out of a savings account. These are electronic transfers.

I was wondering if someone would reply with this. I don't write checks either, I do online bill pay from my checking account. But those electronic transfers are actually checks, since the definition of a check is a document asking your bank to send money to another person/business, in this case it's an electronic document rather than a physical one. Lots of words and phrases have evolved as technology improves - for example, no one actually dials a phone anymore.

I actually go round and round with my mom about this issue. She's in her 60s and not horrible with technology, but she will not do any sort of online bill pay or money transfer. She's worried about hackers. When I point out that her physical checks have her account number and bank routing number on them and can easily be stolen between her home and the business she's paying, she doesn't see that as a risk.

 

[Toolulu22]

My DD came by in tears today. She got hit with 3 late fees because her payments were rejected by her credit union because they came from a savings account, not a checking account. Under Federal law you can only do 6 transactions from a savings account. She bought a house a few months back and has more bills, but it took until December to exceed the 6 per month limit.
Never thought to warn her about that. Had no idea she was doing everything from her savings not checking account.
Anyone else run into this?

I’m sorry your daughter is having a tough time adjusting to new homeownership and the stress and bills that come along with it. I think that some people may have amnesia, or maybe it was just easier for them, buying your first house. I remember being so stressed about the magnitude and remembering to pay all those new bills coming in- insurance, heat, water, etc. And while the purpose of a savings account is for savings, there are times (like when making a major purchase) that we might need to dip into that savings.

She should have moved it to her checking and now she knows. Sometimes lessons are learned the hard way unfortunately. If the fees are steep maybe she can go sit with a banker and discuss her particular situation and see if they would waive the fees in this one instance. If she has her mortgage through them, maybe they will work with her. While she is there, they can go over the fees so she doesn’t find herself in a pickle again in the future. Good luck.

 

[Toolulu22]

I was wondering if someone would reply with this. I don't write checks either, I do online bill pay from my checking account. But those electronic transfers are actually checks, since the definition of a check is a document asking your bank to send money to another person/business, in this case it's an electronic document rather than a physical one. Lots of words and phrases have evolved as technology improves - for example, no one actually dials a phone anymore.

I actually go round and round with my mom about this issue. She's in her 60s and not horrible with technology, but she will not do any sort of online bill pay or money transfer. She's worried about hackers. When I point out that her physical checks have her account number and bank routing number on them and can easily be stolen between her home and the business she's paying, she doesn't see that as a risk.

My husband is distrustful as well. He physically deposits money and checks and only writes out checks. They sometimes get lost in the mail. Actually about once per year we have a check that he wrote lost in the mail, and he sometimes has to have a customer resend a check that is never received (that the person mailed).

I’m not going to argue with him. He does it his way, I do it my way.

 

[Searc]

Judging from the responses, a lot of people had no idea about this restriction.

That's because most people don't pay bills out of their savings account.

 

[tvguy]

After so many years without issues? Was she withdrawling a lot before?

A savings account isn't meant to be withdrawn a ton of times as part of the intent into it. Was she confused on what type of account she had and thought it was just like a checking account?

The reason I mentioned my account when I was 8 or 9 is because at that age I fully understood the limits to the account, the daily required minimum balance, the interest rate and the amount of times I could withdrawl from it. It's not that I expect every kid to know that, especially if their parents set up the account when they were way to young to even remember but if she's had the account for 10 years she was probably of an age to understand basics to the account and as you age that's going to be on you to know. If I didn't know about things I would say that's on me, my bad for not knowing.

When I think of things that trip people up it's usually things like overdraft fees increasing, service charges to accounts that didn't used to be there or increasing in the service charge, the financial institution converting your account to a different type that may have different terms and conditions, etc.

I've been with my bank for nearly 14 years. They've converted my account several times, I still have an old account that I don't want them to convert but it comes with service fees now, my credit card with them was converted to a rewards cash back card automatically. Now that stuff was sent to me in notices or my online account and that can more easily get buried. My husband and I have had the Money Market account for nearly 7 years now and I do remember when signing up for the account the stipulations on it though. If I didn't know though about what stipulations come with it I can go onto my Mobile Banking account and find out though. Does she use Mobile Banking or the like to go into her account to look at the rules regarding her accounts?.

I guess until last month she never exceeded 6 withdrawals. Having a house and related expenses and Christmas spending changed her payment patterns that I guess. The Credit Union isn't levying the fees, the creditors are even though they see that she made an attempt to pay the bill (and got a confirmation) on time.

I'm an old fogey, any bank that ever tried to charge me a fee for anything would hear about it and if they didn't wave it, I would be moving my accounts. I did do that in 1980 when a local bank known for free checking started charging, just as their competitors were offering free checking
I've been "sold" twice my original bank got sold to another bank which got sold in a third bank in 1996. I did get caught in the 6 transfer rule in 1996 because my new (and current ) bank converted my money market checking to a savings account. They had no equivalent account. But they called me to warn me rather than rejected the transaction.
Was odd when I went to the ATM last week and the screen said "Thanks for being a customer for 55 years". I've only been with this bank since 1996, but the original account at the original bank was opened in 1965 when I was 7,

 

[tvguy]

I’m sorry your daughter is having a tough time adjusting to new homeownership and the stress and bills that come along with it. I think that some people may have amnesia, or maybe it was just easier for them, buying your first house. I remember being so stressed about the magnitude and remembering to pay all those new bills coming in- insurance, heat, water, etc. And while the purpose of a savings account is for savings, there are times (like when making a major purchase) that we might need to dip into that savings.

She should have moved it to her checking and now she knows. Sometimes lessons are learned the hard way unfortunately. If the fees are steep maybe she can go sit with a banker and discuss her particular situation and see if they would waive the fees in this one instance. If she has her mortgage through them, maybe they will work with her. While she is there, they can go over the fees so she doesn’t find herself in a pickle again in the future. Good luck.

The Credit Union isn't charging anything, it is late fees for the bills. But they add up to less than $100. Lots of surprises, one of the bills was a supplemental property tax bill that someone was not planned for in her escrow accounts. That has been fixed too.

 

[tvguy]

That's because most people don't pay bills out of their savings account.

I guess. But there seem to be a growing number of people who have no checking account at all. I suspect they put everything on a credit card and only have one payment come out of their savings per month

 

[Searc]

I guess until last month she never exceeded 6 withdrawals. Having a house and related expenses and Christmas spending changed her payment patterns that I guess. The Credit Union isn't levying the fees, the creditors are even though they see that she made an attempt to pay the bill (and got a confirmation) on time.

I'm an old fogey, any bank that ever tried to charge me a fee for anything would hear about it and if they didn't wave it, I would be moving my accounts. I did do that in 1980 when a local bank known for free checking started charging, just as their competitors were offering free checking
I've been "sold" twice my original bank got sold to another bank which got sold in a third bank in 1996. I did get caught in the 6 transfer rule in 1996 because my new (and current ) bank converted my money market checking to a savings account. They had no equivalent account. But they called me to warn me rather than rejected the transaction.
Was odd when I went to the ATM last week and the screen said "Thanks for being a customer for 55 years". I've only been with this bank since 1996, but the original account at the original bank was opened in 1965 when I was 7,

This particular Reg D law went into effect in 2008. If the bolded is true, it was a bank policy, not federal.

 

[msjprincess]

I guess. But there seem to be a growing number of people who have no checking account at all. I suspect they put everything on a credit card and only have one payment come out of their savings per month

Really? I don't know anyone that just has a savings account and no checking account. Well, besides little kids. I don't see the point.

 

[gwynne]

....

I guess until last month she never exceeded 6 withdrawals. Having a house and related expenses and Christmas spending changed her payment patterns that I guess. The Credit Union isn't levying the fees, the creditors are even though they see that she made an attempt to pay the bill (and got a confirmation) on time.

I'm an old fogey, any bank that ever tried to charge me a fee for anything would hear about it and if they didn't wave it, I would be moving my accounts. I did do that in 1980 when a local bank known for free checking started charging, just as their competitors were offering free checking
I've been "sold" twice my original bank got sold to another bank which got sold in a third bank in 1996. I did get caught in the 6 transfer rule in 1996 because my new (and current ) bank converted my money market checking to a savings account. They had no equivalent account. But they called me to warn me rather than rejected the transaction.
Was odd when I went to the ATM last week and the screen said "Thanks for being a customer for 55 years". I've only been with this bank since 1996, but the original account at the original bank was opened in 1965 when I was 7,

I think the main issue is your daughter needs to understand that attempting to bank in an odd or unusual way may not work out well.
A savings account is for savings. A checking account is for paying bills. Most of us don't write checks very often now, but we use the account for bill pay.
She can use a debit card out of her checking, and reconcile it like a checking account.

Back to having a conflict with a bank or credit union. It's best to work within what is basically normal. If you choose to go outside of that, your choice.
Sometimes bank fees may be waived, sometimes maybe they aren't. Frankly, not every customer is a valuable customer. It varies on how they might see things.

I would absolutely expect that creditors would levy fees for not being paid on time. It's totally irrelevant she "tried" to pay on time.

Certainly it's OK to be sympathetic, but this was a guaranteed problem, eventually. Good she now knows the why's and how's of using a checking account.

 

[Mackenzie Click-Mickelson]

I guess until last month she never exceeded 6 withdrawals. Having a house and related expenses and Christmas spending changed her payment patterns that I guess. The Credit Union isn't levying the fees, the creditors are even though they see that she made an attempt to pay the bill (and got a confirmation) on time.

I'm an old fogey, any bank that ever tried to charge me a fee for anything would hear about it and if they didn't wave it, I would be moving my accounts. I did do that in 1980 when a local bank known for free checking started charging, just as their competitors were offering free checking
I've been "sold" twice my original bank got sold to another bank which got sold in a third bank in 1996. I did get caught in the 6 transfer rule in 1996 because my new (and current ) bank converted my money market checking to a savings account. They had no equivalent account. But they called me to warn me rather than rejected the transaction.
Was odd when I went to the ATM last week and the screen said "Thanks for being a customer for 55 years". I've only been with this bank since 1996, but the original account at the original bank was opened in 1965 when I was 7,

So sounds like she was unaware of how savings accounts work. I can understand drawling from an account like that for a new house like a down payment, closing costs, etc but related expenses to a house and Christmas spending are not really good expenditures for a savings account. That's something far more frequent than what a typical savings account is meant for.

If I hadn't had my account with my bank for so long yeah I probably would have closed and moved too although free checking isn't as common as it used to be. Savings accounts though have long had requirements usually tied to minmum balances and/or cumulative balances between the accounts, etc

My checking started as a free student account, converted to another account and then another account. I can convert it to another type of account without fees but there's other rules that I didn't really like so I told them not to convert yet.

My joint checking with my husband though has been converted to another account too. Our Money Market however has never changed. But we did flip who was the main person. Originally it was me but it was easier to flip to my husband at some point; can't remember the exact reason though. My husband also has his own checking account with the same bank. Having multiple accounts and longevity has helped us though. I have a checking, a joint checking, a joint money market and a credit card. My husband has a checking, our joint money market and I can't remember if he has a credit card with them or not.

My original savings account, that has been closed for a while now, was with World Savings. Then Wachovia bought them out then Wells Fargo bought out Wachovia. The account rules though stayed the same throughout.

 

[tvguy]

....

I think the main issue is your daughter needs to understand that attempting to bank in an odd or unusual way may not work out well.
A savings account is for savings. A checking account is for paying bills. Most of us don't write checks very often now, but we use the account for bill pay.
She can use a debit card out of her checking, and reconcile it like a checking account.

Back to having a conflict with a bank or credit union. It's best to work within what is basically normal. If you choose to go outside of that, your choice.
Sometimes bank fees may be waived, sometimes maybe they aren't. Frankly, not every customer is a valuable customer. It varies on how they might see things.

I would absolutely expect that creditors would levy fees for not being paid on time. It's totally irrelevant she "tried" to pay on time.

Certainly it's OK to be sympathetic, but this was a guaranteed problem, eventually. Good she now knows the why's and how's of using a checking account.

The Credit Union isn't charging her anything so no issues with them for fees. Yeah, she is going to have to change her paycheck direct deposit to checking. And she ordered checks, something she never thought she would do because she discovered as a homeowner, there are just some things that are cash or check only (handyman, etc)

 

[tvguy]

Really? I don't know anyone that just has a savings account and no checking account. Well, besides little kids. I don't see the point.

We have a few here at work. They have a credit card and a savings account. Apparently they charge everything then make one payment from savings a month. LOL they are ones who scramble to get cash when things like Girl Scout cookies and Cookie Dough fundraisers come up because not only do they not have a checking account or checks, they don't use cash.

 

[tvguy]

This particular Reg D law went into effect in 2008. If the bolded is true, it was a bank policy, not federal.

No, it appears it was amended in 2008 but was in effect before that. And it is a Credit Union not a bank, I guess that could make a difference. However, I think the account was opened before 2008, so maybe the rule was not in effect when she opened the account.