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

[tvguy]

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?

 

[easyas123]

I do - but mainly out of a checking. Only have one coming out of a savings.
A very similar thing happened to my son, he didn't realize either.

 

[fla4fun]

I use my checking. It is easier for me to move money from the savings to checking in one lump if needed (like when I bought a new car) than to pay bills directly from savings. Last time I checked I was limited to three withdrawals per month on the savings, but I doubt if I do that many in a year. I have the accounts linked so the savings covers any minimum balance requirements, and my checking is fee free that way.

 

[Deb & Bill]

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

 

[gwynne]

She could stop by her credit union and get a checking account in about 5 minutes.
Seriously, overcomplicating simple things wastes time and energy.
As @Deb & Bill mention above, you can transfer funds between the accounts.

 

[tvguy]

She could stop by her credit union and get a checking account in about 5 minutes.
Seriously, overcomplicating simple things wastes time and energy.

She has a checking account with them. But that wasn't what she was paying bills out of, or having her paycheck deposited into.

 

[gwynne]

She has a checking account with them. But that wasn't what she was paying bills out of, or having her paycheck deposited into.

Has she corrected the situation? Deposit the pay into checking. Move funds into savings. Keep her busy life easier to manage.

 

[NYCgrrl]

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 wouldn't have thought to warn her either .
I rarely withdrew from a savings account when I worked but did have a checking account as well. Your DD learned an expensive lesson but at least she learned it early.

 

[barkley]

we saw this issue was a concern for dd when we helped her set up her budget (while in college/then with first post graduation job). we do it this way-

paycheck direct deposits to savings,

savings pays rent (autopay)-counts as 1
savings does 2 'household' (expenses/gas/grocery...) lump sum transfers to checking per month which she uses for all misc. things-2 and 3
savings does lump sum utility transfer to checking 1 time a month (paid out of checking)-4
savings does a transfer to a medical savings account 1 time a month-1 (she transfers from it to checking to pay copays, scrips)


leaves 1 extra transfer if she needs it.

note-if she were to set up auto pays or try to pay a bill that exceeded the 6 per month it would still honor it but she would get hit with a $5 per use fee. that max is only what you can do free of charge.

 

[kimblebee]

I don’t have any bills on auto pay so whatever account has the money in it is the one I use to pay the bill. My accounts have no limits on transactions or etransfers or bill payments so it doesn’t really matter

 

[Carol_]

I charge them to credit, then pay the credit card bill. Then I use the points toward Disney vacations.

 

[DLgal]

I charge them to credit, then pay the credit card bill. Then I use the points toward Disney vacations.

Me too. I have the ones that don't allow payment via credit card on autopay via my checking account.

 

[C&Jx2]

Checking

 

[tvguy]

Has she corrected the situation? Deposit the pay into checking. Move funds into savings. Keep her busy life easier to manage.

Yes. Well, her paycheck still goes into savings, and she will just transfer what she needs to pay bills to checking once per month.

 

[Kitty 34]

checking

TVGuy, my Money Market is that way; only so many transactions are allowed in a month. Have your wife call about the late fees; the companies might let up on those late fees if she really hasn't had others.

Oops, I misread your OP........your DD.

 

[tvguy]

I don’t have any bills on auto pay so whatever account has the money in it is the one I use to pay the bill. My accounts have no limits on transactions or etransfers or bill payments so it doesn’t really matter

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.

 

[spiders]

With the interest rate on savings accounts, it's just not worth it to me to go through the hassle of transferring money into and out of it. Honestly, I'm waiting to file my taxes because I switched banks early in the year and now I have to wait for that stupid 1099 to come in the mail to show me the $1 in interest I earned last January.

I pay anything and everything I can with credit cards and then autopay all of those bills out of checking.

 

[NYCgrrl]

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.

My business checking account doesn't work like that. Still as long as I keep a certain amt with in tit I pay no monthly fee.

 

[tvguy]

My business checking account doesn't work like that. Still as long as I keep a certain amt with in tit I pay no monthly fee.

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

 

[wenrob]

I don’t have any bills on auto pay so whatever account has the money in it is the one I use to pay the bill. My accounts have no limits on transactions or etransfers or bill payments so it doesn’t really matter

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.