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

[amcnj]

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.

You might want to check if the bank will even issue a 1099-int. Some of mine don’t issue one for amounts under $10.

 

[AuntieMe3]

I have two checking accounts, one for day to day living and the other for things I have on autopay...like our mortgage, insurance, car payments...etc. The day to day checking gets the direct deposit and I auto transfer to my other accounts(savings too).

 

[sam_gordon]

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.

We've been able to split payroll direct deposits for my paychecks for decade. I think I'm splitting my check into three checking accounts (one just for mortgage, one for other bills, one for daily debits) and a savings account.

 

[Mackenzie Click-Mickelson]

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 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.

 

[Mackenzie Click-Mickelson]

Savings accounts are generally used..as savings..so yeah it's understandable, though arbitrary the exact number you can withdrawl from it.

We pay our escrow shortage out of our money market account so it's withdrawled from once per 12 months and that is actually how frequently the bank requires in order to keep the account active too.

 

[Skippy918]

I was not aware of reg D either when I was a young adult straight out of college. Now, I don’t really use the savings account. The interest rate is so low that it doesn’t even matter. Everything goes in and out of checking.

 

[trip]

Just one of those life lessons that she’ll never do again. We pay for everything that we can with credit cards and pay them in full every month. Other bills I “push” from a checking account. Probably write less than 24 checks a year.

 

[msjprincess]

We have our direct deposit split into 3 accounts. We have a set amount go in a checking account for bills which are almost all on auto pay, a set amount into savings and whatever is left goes into another checking account which is used for day to day spending.

 

[leebee]

I had no idea about regulation D and I'm 63, so age doesn't have anything to do with it, I guess. I honestly don't remember the bank saying anything about limiting the number of withdrawals we can make from our savings account every month, nor do I recall a requirement for the number of annual transactions needed to keep an account open (as someone mentioned above for a different type of account). I think I'm going to go visit my bank and talk with them, just for the info. These accounts have all been open for 20+ years, so it's possible that some things have changed, and others I have just forgotten!

 

[HappyDznyCamper]

I had no idea about regulation D and I'm 63, so age doesn't have anything to do with it, I guess. I honestly don't remember the bank saying anything about limiting the number of withdrawals we can make from our checking account every month, nor do I recall a requirement for the number of annual transactions needed to keep an account open (as someone mentioned above for a different type of account). I think I'm going to go visit my bank and talk with them, just for the info. These accounts have all been open for 20+ years, so it's possible that some things have changed, and others I have just forgotten!

There is no federal limit on your checking, the Reg D withdrawal limit only applies to savings accounts.

 

[Ellie008]

I think I became aware of this when I first opened an online savings account (for higher interest rate). They put that information in several places so people were aware of it.
I recall your thread about your daughter not having checks at all. Maybe this stems from that mindset. If you aren't writing checks, why worry about paying things out of a checking account? I wrote checks for many things in college, and have always paid all my bills from the checking account and used the savings account for money I planned to save. I'm not sure I was even aware I COULD pay bills directly from my savings account. That just seems wrong.

 

[Disneybuckeye]

We've been able to split payroll direct deposits for my paychecks for decade. I think I'm splitting my check into three checking accounts (one just for mortgage, one for other bills, one for daily debits) and a savings account.

Us too. We have a set amount from out take home pay go into savings and the rest into checking. We pay bills out of checking and move money over if needed to cover a large expense. I also move money to savings if we happen to have extra in checking over and above the few extra thousand I keep in there for just in case.

OP, I am sure your daughter was sad to lose that money. As my daughter tells me occasionally, adulting is hard sometimes.

 

[RedAngie]

Monthly and quarterly utilities and car insurance are auto pay with a credit card to get rewards points. Then the credit cards are paid from checking accounts. I have it set up that the minimum gets automatically paid in case I forget to make a credit card payment.

I probably haven't had a "savings account" in 30 years. About once a month, I transfer money from checking into various investment accounts.

 

[soccerdad72]

We don't really have a traditional savings account, just checking.

 

[Mickeypooh99]

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.

It would be easy for young adults to not be awareness of this. We opened our kids savings when they were infants. This was before the regulation existed and before they could read the fine print. I actually took my 16 year old (in 2016) to see if he could get a debit card for his saving account. We were told about the limit at that time, and I was surprised by it. I guess I had missed the announcement back when it started. Or maybe I had forgot about it. I asked my husband, and he wasn’t aware of it either.

 

[Anchored]

I pay all of the bills that I can with my Marriott Bonvoy Amex (hello free stays at the Swan and Dolphin)
My amex and my mortgage still come out of my checking
I don't touch or use my savings for anything but saving. The day before I get paid again, I transfer anything left in my checking to my savings

 

[Mackenzie Click-Mickelson]

It would be easy for young adults to not be awareness of this. We opened our kids savings when they were infants. This was before the regulation existed and before they could read the fine print. I actually took my 16 year old (in 2016) to see if he could get a debit card for his saving account. We were told about the limit at that time, and I was surprised by it. I guess I had missed the announcement back when it started. Or maybe I had forgot about it. I asked my husband, and he wasn’t aware of it either.

But this poster's daughter IIRC got the account recently enough. When you sign up for an account you are told or should be told how many times you can withdrawal from your savings account. And the paperwork should reflect the terms of the account like interest rate, fee schedules, transaction limit, any minimum balance requirement,etc.

I'm sure it's easy to forget when your kid is a baby and fast forwarding to when they are of age for a debit card so understandable there but at some point that's not really going to fly when you open the account yourself and it's not been 10,15+yrs.

At least for me it's not fine print either. If I go to my bank's website right now and go to types of accounts it tells me all the stipulations. I do think it's more understandable when the terms and conditions change after you've opened the account in terms of losing the information on the notices sent.

 

[tvguy]

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.

She did and they said no on waiving the late fees.

 

[mjkacmom]

We don't really have a traditional savings account, just checking.

Same, we have a mutual fund that some money gets directly deposited to, an emergency fund. However, I’ve gone to the bank with my kids when they turned 17, and it seems routine that they set them up with at least one savings account and a checking account these days.

 

[tvguy]

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?

It is a life lesson for sure. She is normally pretty much on top of things, lived overseas for a year without issue, and has had these accounts 10 years and this just came up.