Can You Pay Bills From a Savings Account?

You can often pay your bills directly from savings. But your bank may limit how many transfers you can make, and some billers won’t accept a payment from a savings account at all. If a payment gets blocked, you could owe a returned payment fee or a late fee. Moving the money to checking first avoids both problems.

Can you pay bills from a savings account?

Many banks let you pay bills from savings, but your bank and the company you’re paying both have to allow it. Here’s where it can go wrong.

Your bank might limit transfers

Federal rules used to cap most savings withdrawals at six per month. The cap covered online, phone, and automatic transfers, but not ATM or in-person withdrawals. In April 2020, the Federal Reserve struck the six-per-month limit, and it hasn’t come back.

Many banks still set their own limits. If you go over, you may pay a fee, or the bank may block the transfer. Your deposit account agreement or fee schedule lists your limit and what happens if you exceed it.

Your bank’s bill pay feature might not work with savings

Online bill pay is usually set up to pull from checking. Some banks let you choose a savings account instead, and some don’t. Check the account options in your bank’s bill pay settings.

The company you’re paying might not accept savings

Most online bill payments run through the Automated Clearing House (ACH) network, the system banks use to move money electronically. Payments from checking almost always go through. Some billers, including some card issuers and utilities, accept only checking accounts. The account type menu on the biller’s payment page will tell you.

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How to pay bills from a savings account

Savings accounts usually don’t come with checks or a debit card. That leaves three options.

Pay directly by ACH

If the company you’re paying accepts savings accounts, enter your savings account and routing number on its payment page, just as you would for checking.

Use your bank’s bill pay

Some banks let you schedule a bill payment from savings in their online bill pay tool. It counts toward any transfer limit your bank sets.

Transfer to checking first

If your checking and savings accounts are at the same bank, a transfer between them usually shows up right away. Then pay the bill from checking. This is the most reliable option, because bills that take bank payments accept checking.

The six-withdrawal rule is gone, mostly. Federal rules used to cap most savings withdrawals at six a month , including online transfers, phone transfers, and automatic payments, though not ATM or in-person withdrawals. The Fed suspended that limit in 2020 and hasn’t reinstated it.

Banks can still enforce their own version, and many do. Check your account agreement before you assume you have unlimited transfers, because some still charge a fee past six.

When to use checking instead

When the payment repeats every month

Autopay from savings uses up one of your bank’s transfers every month. Several bills on autopay can reach a bank limit quickly, and each extra transfer can cost a fee. Checking accounts don’t have these limits.

When you want your savings to earn more

If bills come out of your savings account, it gets harder to tell what you’ve saved from what you owe for rent and utilities. Paying bills from checking keeps them separate. It also frees your savings to sit somewhere that pays more.

Traditional savings pays very little. At the FDIC’s national average of 0.37%, $1,000 earns about $3.70 a year. High-yield savings accounts offered by online banks and credit unions can pay 10 times that. Some online accounts are paying 4% APY as of publishing. At that rate, the same $1,000 would earn about $40 a year. Rates are variable and differ from bank to bank, so compare current rates before you open an account.

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Bottom line

You can often pay bills from savings, but transferring to checking first avoids bank limits and blocked payments.

Paying those bills on time usually doesn’t add anything to your credit report, because most billers don’t report on-time payments. A Kikoff Credit Account reports your on-time payments to Equifax, Experian, and TransUnion. There’s no credit check to sign up, and plans start at $5 a month.