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

[okeydokey]

I put everything on our rewards credit card and then pay that bill every two weeks out of checking.

 

[slpeters]

I've been in banking for a long time and a lot of people, even very wealthy people, are blindsided by Reg D.

 

[Southernmiss]

My first reaction is she's in her mid to late 20s. An adult with her own home, job, and college degree. The banks give you info on their accounts and number of transactions to read at your leisure.

Why go to mom and dad in tears?

 

[L&Lfan]

I only have a checking account. If I need more money which is rare, I take it from my investment portfolios.

 

[DisLiss]

I pay everything out of checking. Even before the days of being hit with fees or having limits on Savings Accounts transactions, the idea of paying out a Savings Account would never have occurred to me, because I always viewed the Savings Account as being strictly for saving money for either a specific future item or just for the future in general. That's just how it worked in my mind: Savings Account for money you don't want to spend and Checking for money you do plan to spend. Actually it still works that way in my mind.

Back in the "old days" if I needed or wanted to spend money from my savings account I physically went to the bank and asked them to move the necessary funds from my savings to my checking acct. Since internet banking became possible, if I need money from savings for some reason, I just transfer it to my checking account myself. But I have never once in my life paid a single thing out of my Savings Account.

 

[HappyDznyCamper]

I've been in banking for a long time and a lot of people, even very wealthy people, are blindsided by Reg D.

Yup, reg D is what we are talking about here. Among other things Reg D limits electronic withdrawals from a savings account to 6 per month. More withdrawals can be made but must be made in person and signed for(subject to your institutions fees). Savings accounts are supposed to be savings accounts, not transaction accounts.

 

[DisLiss]

Yup, reg D is what we are talking about here. Among other things Reg D limits electronic withdrawals from a savings account to 6 per month.

Not only that, but some banks have further restrictions or fees as well. If I were to start messing with my savings, I'd be hit with fees rather quickly. But I don't mess with it, so it's all well & good. But I can do all that I want whenever I want with the checking account and it's all fine and dandy. Besides, I'm one of the people in this world who actually still writes checks, LOL--so the money needs to be in checking!

 

[indimom]

Huh, never would have occurred to me that people would use savings for paying bills and checking for.… what then??
My adult children have their checks deposited to checking, then move what they plan to save into savings; and, keep what they know they will spend in checking for their use. Occasionally, they move money the other direction if a large bill or unexpected expense shows up. Otherwise, savings goes untouched.

 

[kimblebee]

No limits means they are all checking accounts. Only savings accounts have the 6 transfer limit, and that isn't the credit union rule, it is federal law.

It’s federal law with savings.

My DD has her checks deposited into Savings, pays all her bills and whatnot (including any auto pays) with her credit card then transfers to checking and pays the card.

I pay whatever I can with my credit cards and then pay from Checking. Pay check goes into Checking and a set amount auto transfers to Savings.

Not federal law for me lol

 

[Southernmiss]

Huh, never would have occurred to me that people would use savings for paying bills and checking for.… what then??
My adult children have their checks deposited to checking, then move what they plan to save into savings; and, keep what they know they will spend in checking for their use. Occasionally, they move money the other direction if a large bill or unexpected expense shows up. Otherwise, savings goes untouched.

Exactly. Each of our 4 kids went to our credit union before starting college to open a checking account and get a debit card so they could take care of their own charges. They transfer as needed from savings to cover larger bills.

 

[Kathryn Merteuil]

I use the checking account.

 

[NYCgrrl]

So it IS a checking account since you called it one?

Yes, it's a corporate business checking account under the rules of NYS. I need to maintain a specific balance monthly and spend a specific amt as well to avoid monthly fees.

 

[CdnCarrie]

No such weird savings account rule here.

That said I use my chequing.

 

[barkley]

Exactly. Each of our 4 kids went to our credit union before starting college to open a checking account and get a debit card so they could take care of their own charges. They transfer as needed from savings to cover larger bills.

this started with college for our dd as well. the only reason she got into the habit of doing direct deposit with income to a savings vs. a checking account is when she went to set up accounts the credit union banker cautioned us that since she was going to get quarterly big deposits from her university (they handled all scholarship $ and refunded it quarterly after all tuition/fees were paid) it was safer to have it go into a savings account that wasn't linked to a debit card (which her checking account would be). the credit union had experienced students whose entire quarter's living expenses that were sitting in a checking account or a linked for overdraft savings account stolen via a debit card hack. they suggested having an entirly separate savings account to use for minimal transfers to checking as needed.

after the credit union caught and declined an attempted multi thousand dollar charge on her debit card a year or so ago (ironically for a foreign disney property) she won't let her paycheck direct deposit in any account linked to a card.

 

[DisLiss]

I just wanted to add that I always had my paychecks deposited into my checking account as well. The only exception to that was that for the last few years I was with one company, they gave you the option of splitting your check into two direct deposits, so I had most of it go to my checking account, and a certain amount went into a special savings account where we saved money for vacations.

 

[rigs32]

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?

 

[tzolkin]

I’m also quite surprised to hear several people posting about having their paycheck deposited into savings and paying bills from there. In my mind, that’s the entire purpose of a checking account— to hold hold the money that will be used to pay bills (whether by writing actual checks or by online transfer)

 

[barkley]

I just wanted to add that I always had my paychecks deposited into my checking account as well. The only exception to that was that for the last few years I was with one company, they gave you the option of splitting your check into two direct deposits, so I had most of it go to my checking account, and a certain amount went into a special savings account where we saved money for vacations.

i was amazed when dd showed me the on-line payroll options the company she works for uses. she can opt for directing depositing either percentages or dollar amounts of her pay into multiple separate accounts.

 

[wenrob]

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?

See below. Most people do not write checks or pay bills directly from Savings. They keep their money in Savings and then transfer to Checking when it’s time to pay the bills.

this started with college for our dd as well. the only reason she got into the habit of doing direct deposit with income to a savings vs. a checking account is when she went to set up accounts the credit union banker cautioned us that since she was going to get quarterly big deposits from her university (they handled all scholarship $ and refunded it quarterly after all tuition/fees were paid) it was safer to have it go into a savings account that wasn't linked to a debit card (which her checking account would be). the credit union had experienced students whose entire quarter's living expenses that were sitting in a checking account or a linked for overdraft savings account stolen via a debit card hack. they suggested having an entirly separate savings account to use for minimal transfers to checking as needed.

after the credit union caught and declined an attempted multi thousand dollar charge on her debit card a year or so ago (ironically for a foreign disney property) she won't let her paycheck direct deposit in any account linked to a card.

 

[amcnj]

Pretty much always a checking account. I ran into the limits with a money market account years ago, when they had super high interest rates, but was informed when I opened it about the monthly limit. I used that for big purchases or to move money to and from a checking account.