How to Withdraw Money from a Savings Account

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If you have a savings account at a financial institution where you have other accounts, you can usually transfer money between those accounts. This includes lines of credit and credit cards. Typically banks offer free transfers between the accounts, with the exception of credit cards. Some banks also charge when you make more than three transfers from a savings account in one month. When you are ready to transfer money from your savings account to another account at the bank, there are usually four ways in which you can do so.

Sign into your online banking account, if you have one. Go to the “Transfers” section of your account and select your savings account for the “From” account and the destination account for the “To.” Enter in the transfer amount. Click on “Continue” or “Transfer” to complete your request for a transfer.

Call your bank’s customer service line, which can be found on your bank statement. Ask the representative to transfer money from your savings account to one of your other accounts. Give the amount you want transferred and the account it is going to.

Use your debit card or ATM card, if you have one for your savings account, to transfer your money at the ATM. After entering in your PIN, select that you want to transfer the money. Select the account you want it to go into and the amount before pressing “Enter” to confirm.

Visit your local bank branch and ask to transfer the money. Usually you will need to fill out a withdrawal slip for the savings account and a deposit slip for the other account to complete the process.

• Wells Fargo: Transfer Questions
• Bank of America: Purchases, Payments and Transfers

Jamie Lisse has been writing professionally since 1997. She has published works with a number of online and print publishers. Her areas of expertise include finance and accounting, travel, entertainment, digital media and technology. She holds a Bachelor of Arts in English.

The Savings Account Withdrawal Limit Depends on How You Withdraw Money

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If you have a savings account, there is a limit to how many withdrawals you can make. The savings account withdrawal limit is no more than six “convenient” withdrawals per month. Money transfers you make online, by phone, through bill pay, or by writing a check are considered convenient, but certain other withdrawal types don’t count toward the limit.  

If you occasionally exceed the limit, your bank may decline your excess transactions or charge you a fee. If you exceed that limit often, your bank will convert your savings account to a checking account or close the account altogether.  

Key Takeaways

• The savings account withdrawal limit is no more than six per month and applies to transactions such as overdraft and bill-pay transfers and debit card transactions.
• Some withdrawal types, such as visiting a teller in person, don’t count toward the limit.
• The primary reason for the limit is that banks only hold a small percentage of consumers’ deposited funds in reserve.
• The federal government insures the money you deposit in your bank up to $250,000 per depositor.

Why Is There a Savings Withdrawal Limit?

The money in your savings account is yours, so why can’t you access it as often as you want? Because a federal law called Regulation D doesn’t allow it.  

Banks operate under what’s called a fractional reserve system. When you deposit any amount of money in your bank account, the bank uses most of that money for other things, such as consumer loans, credit lines, and home mortgages. The bank holds only a small fraction of its customers’ deposits. This is how banks make money and how consumers are able to borrow.  

Distinguishing among different types of accounts helps banks keep enough reserves. Checking accounts are designed to handle many transactions. Money is constantly flowing into and out of them. As a result, it’s difficult for a bank to rely on customer checking account balances to meet the federal government’s reserve requirements. In fact, the government doesn’t even require banks to keep reserves on checking account balances.  

There are no limits to the number of deposits you can make to a savings account.

What are Convenient Transactions?

Savings accounts are designed to receive deposits. But they aren’t meant for frequent withdrawals, only occasional ones. That’s why it’s a good idea to pay your bills from your checking account, not your savings account.  

This six-per-month limit applies to these types of convenient savings account transactions:  

• Overdraft transfers
• Electronic funds transfers (EFTs)
• Automated clearing house (ACH) transfers
• Transfers or wire transfers made by phone, fax, computer, or mobile device
• Checks written to a third party
• Debit card transactions

Which Transactions Do Not Apply to the Savings Withdrawal Limit?

You might use your savings account to pay large, irregular bills, such as insurance or property taxes, and that’s fine. You are entitled to those six withdrawals per month. In fact, you can actually exceed that limit if you withdraw money in a few ways:  

• By visiting a teller in person
• By withdrawing cash from an ATM
• By transferring money from savings to checking at an ATM
• By asking your bank to send you a check

Since these methods are considered “inconvenient,” they don’t count toward the six-withdrawal limit. All the same, banks may still charge you for more than six withdrawals or transfers from savings per month even if some of the withdrawals use an inconvenient method.  

How to Avoid Withdrawal Limits

Besides using a checking account for most of your transactions, there are a couple of other ways to avoid running up against Regulation D’s limits. If you expect to use your savings to make more than six transfers or payments in a given month, make one larger transfer from your savings to your checking account and then conduct your transactions out of your checking account. If you’re already at the limit, you can move more money out of savings using the methods mentioned earlier.

Don’t Fear, Your Deposits Are Covered

Does it make you nervous that your bank doesn’t really keep most of the money you deposit on hand? It shouldn’t. The Federal Deposit Insurance Corporation (FDIC) protects the money you put in your bank. Up to $250,000 per depositor—per institution—is covered. If your bank should become insolvent, FDIC insurance means you won’t lose your money. If banks did have to keep 100% of customers’ deposits on hand, it would be harder for you to get a loan to buy a car, buy a home, or start a business.  

A deposit can take up to five trading days to complete and you will not be able to withdraw or spend the funds while it is in flight. Once it’s marked completed, it will be ready for withdrawal.

Settlement Period

Following a sale, your funds need to “settle” before you can withdraw them to your bank account. The settlement period is the trade date plus two trading days (T+2), sometimes referred to as regular-way settlement. On the third day, those funds will go into your buying power and will appear as withdrawable cash.

Withdrawing to a Different Bank Account

For 60 days following a deposit, you may be required to verify additional information if you wish to withdraw funds to a different bank account than the one you originally deposited them from.

If the original bank account is closed or you are unable to access it, our support team can help initiate a withdrawal to another bank account for you. Please be aware you may be required to share:

• A brief description of why you are unable or unwilling to withdraw to the bank account you originally deposited funds from.
• A photo of the front and back of your government-issued ID.
• Bank statements showing that you are the account holder of the two linked bank accounts. Photos or PDFs must be clear and easy-to-read.
• Amount and specific bank account that you’d like to transfer funds to.

Referral Stock

The cash value from a referral stock needs to remain in your account for at least 30 calendar days. If you sell your free stock before the 30 days, you will not be able to access those funds in your withdrawable cash. After the thirty-day window, there are no restrictions on the proceeds. For example, if you win one share worth $10 to your account, you can’t withdraw the $10 you receive by selling the stock until thirty days have passed. The cash value of the stock is determined by the price of the stock at the time you received it. You can check out your History tab for the stock’s value.

Robinhood Gold

If you are using margin on Robinhood Gold, you will need to maintain a brokerage account value of at least $2,000 to meet the minimum requirements to borrow. In order to withdraw below $2,000, you will need to turn off margin in Settings.

Can you withdraw money from a savings account?

ATM Savings Withdrawal

To withdraw money from your savings account at an ATM, you need an ATM card that is issued by your bank. Your ATM card is typically mailed to you when you open your savings account. If you do not have an ATM card, you can contact your bank to have one issued in most cases.

You will also be provided with a personal identification number (PIN) when you obtain your ATM card. This number is keyed into the ATM in order to access your savings account.

Below are the steps to withdraw money from a savings account at an ATM:

• Insert your ATM card into the machines’ card slot.
• Enter your PIN when the ATM requests the number. Press enter.
• Select “Withdraw” when prompted by the machine.
• Select “Savings” for the account type you want to withdraw the money.
• Input or select the amount you want to withdraw.
• Collect your money, ATM card, and the printed receipt.

Please view the short video below for a visual demonstration on how to use an ATM for a withdrawal.

Bank Teller Withdrawal

Some people may not wish to use an ATM or the bank does not allow ATM withdrawals from certain accounts. The alternative to using an ATM is to go inside a bank branch or the drive-through and have a bank teller complete the savings withdrawal.

Here is how to complete a withdrawal with a bank teller:

• Complete a withdrawal slip. The following information is typically required on this slip: account holder name, date, account number, the amount to withdraw, and signature.
• Hand the withdrawal slip and your photo ID, if required, to the teller.
• The teller will access your account through the bank’s computer system and then will issue your cash from your savings account.

View the video below for an example on how to complete a deposit slip.

Online Savings Withdrawal

Online savings accounts have become popular in recent years because they often pay decent interest. However, the downside to online bank accounts is that there is not typically a branch location available nearby. So, how do you withdraw from a saving account using online banking?

ATM – Many online accounts offer ATM cards so that you can easily access your cash at nearly any ATM. Be aware that there may be a transactions fee when using an ATM not associated with your online bank. You may want to review all potential fees before opening an online account.

Transfer – Many people hold several bank accounts for various reasons. For example, a person may have a main bank account that they established at a local branch and a separate online savings account. In this situation, a person could transfer funds from their online savings account to their main bank account. Once the transfer was complete, they could withdraw funds using an ATM or teller.

You can withdraw money from an online savings account in several ways.

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Online banking is becoming more widespread — even among smaller local banks. You can manage your savings accounts online and even establish accounts at banks that do all their business online. While this makes it easier to pay bills and manage accounts, it often makes it more difficult to withdraw funds. When you need to withdraw your money from an online savings account, you have several options.

Debit Card

The simplest way to get money from an online savings account is with a debit card. Most online banks offer debit cards to customers, but you may have to provide credit card information to the bank when you apply so the bank can verify your address. Once you get the card in the mail, you can make instant withdrawals at an automatic teller machine or get cash back from a merchant. These cards often carry an ATM transaction fee — especially if you use them at a bank that isn’t your own.

Online Transfer

You can withdraw money from your online account and transfer it electronically to another account, either at the same bank or another bank. The transfer may take a few days if you are transferring the money to another bank, and some banks charge a fee for this service. You will need to know the routing number and the account number of the other bank to make the transfer. These numbers can be found at the bottom of your checks, if you have a checking account. Ask your bank for the routing number if you don’t have any checks, or find the number on the bank’s website.

Check Request

Online banks will mail you a check for a certain amount at your request. You can then cash the check locally or deposit the check into another account. This option requires you to wait for the letter carrier.

Wire Transfer

If you need money quickly, you may be able to request a same-day wire transfer from your online account to a local account. Not all online banks offer this service. A wire transfer is different from a regular account transfer because it it goes directly from one bank to another and does not have to go through a central clearinghouse used for regular transfers. This means it’s quicker. The charge for this type of transfer in 2012 ranges from $10 to $25.

It’s now easier to raid your retirement savings, but in some cases, that could do more harm than good.

The coronavirus has affected nearly every aspect of the way we live, and it’s caused significant economic hardship for millions of Americans. Roughly 50% of U.S. adults say COVID-19 has affected their personal finances, a survey from Pew Research Center found, and 88% say it’s had an impact on the U.S. economy.

As a result, Congress recently passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide economic relief to individuals and businesses who are struggling due to the coronavirus pandemic.

One of the most notable features of the bill is the $1,200 stimulus check millions of Americans will be receiving. But there’s a lesser-known aspect of the bill that could have a significant effect on your finances: You now have the opportunity to raid your retirement fund without facing a penalty.

Image source: Getty Images.

New retirement rules under the relief bill

Previously, if you wanted to withdraw cash from your 401(k) or traditional IRA before age 59 and a half, you’d face income taxes and a 10% penalty on the amount you withdraw. Under the CARES Act, though, you can withdraw up to $100,000 from your retirement account without paying the 10% penalty. Depending on how much you withdraw, this could potentially save you thousands of dollars.

You’ll still need to pay income taxes on your withdrawals, but another change under the new bill is that you now have three years to pay those taxes. If you’re making significant withdrawals, being able to spread your tax payments over three years can ease the financial burden.

Keep in mind, though, that these new rules only apply if you’re using the money for coronavirus-related expenses. To qualify for penalty-free retirement fund distributions, either you, your spouse, or a dependent must have tested positive for COVID-19, or you must have experienced financial hardship due to being laid off, furloughed, or quarantined.

Is it a good idea to withdraw from your retirement fund?

These new regulations make withdrawing from your retirement fund more enticing, but is it a good idea to raid your savings? In general, the answer is no. Even if you won’t pay a penalty and you can spread your tax payments out over three years, there are still short- and long-term consequences to withdrawing your savings before retirement age.

For one, right now is not the best time to take money from your retirement account because stock prices are at rock bottom. You may be tempted to pull your money out of your retirement fund now if your investments have taken a hit in recent weeks, thinking you can salvage your savings before things get worse. However, you don’t technically lose any money until you sell your investments. So if you sell your investments now by withdrawing your cash, you’re locking in your losses by buying high and selling low. If you keep your cash invested, though, you’ll reap the rewards once the market recovers.

There are long-term consequences for withdrawing your cash, as well. Your investments rely on compound interest to help them grow, so the key to building a robust retirement fund is to leave your money alone for as long as you possibly can. Every time you withdraw your money, you’re essentially taking a step back and starting over. The less time your money has to grow, the more challenging it will be to accumulate a significant amount of cash.

Tapping your retirement fund should be a last resort, and even then, it may be wiser to borrow the money rather than withdraw it. The CARES Act also loosened the regulations around 401(k) loans, allowing savers to borrow the full vested amount in their 401(k) up to $100,000 (previously, borrowers could only receive loans of 50% of their vested balance up to $50,000). With a 401(k) loan, although you do have to pay the money back, that can be a good thing because it forces you to keep contributing to your retirement fund — which can help keep your savings on track.

Millions of Americans have been personally affected by the coronavirus, and some people may have no choice but to tap their retirement funds to make ends meet. Although raiding your retirement savings may not be ideal, the good news is that it’s now less expensive to withdraw your cash. Not only will that save you money, but it can also make these difficult times a little easier.

When you retire, you’ll likely rely on your retirement accounts to provide income to supplement Social Security. To ensure your money lasts, you’ll need to decide on a retirement withdrawal strategy.

A retirement withdrawal strategy can help you determine a safe amount of money to take out of your investment accounts each year. The strategy you choose will dictate how much income you make available for yourself, which in turn affects your quality of life in retirement. If you pick the right withdrawal strategy, it will protect against your accounts running dry while you’re still relying on your savings.

There are a number of common retirement withdrawal strategies to consider, including:

Preparing for retirement is a journey.

Explore other approaches to retirement savings.

Your retirement plans likely include investing.

The best retirement plan is the one that best fits your needs.

The right strategy will depend how much money you have saved, how concerned you are about running short of money in retirement, whether you’re considering extreme early retirement using the Financial Independence Retire Early (FIRE) strategy, and how much income your investments need to produce.

Whatever strategy you select, you must withdraw enough money from tax-advantaged investment accounts — such as your SEP, SIMPLE, or traditional IRA or your 401(k) — to meet the IRS rules for required minimum distributions (RMDs). RMD rules mandate you withdraw a certain portion of your investment account balance each year after you reach age 72. If you don’t, you’re subject to a 50% tax penalty on the amount you failed to withdraw.

The 4% rule

If you follow the 4% rule, you’ll withdraw 4% of your investment account balance in your first year of retirement. Each year, you’ll increase the amount to keep pace with inflation, the rising cost of goods and services.

If you follow the 4% rule and begin retirement with a nest egg of $500,000, you would withdraw $20,000 during your first year of retirement. If there’s 2% inflation (which is the Federal Reserve’s target rate of inflation), you would withdraw $20,400 the following year.

The major benefit of the 4% rule is that it’s a simple approach and your buying power keeps pace with inflation. However, with rising interest rates and increased market volatility, there’s a risk you could run out of money using this approach. This rule also doesn’t provide flexibility to adjust based on the performance of your investments.

The chart below shows the income that would be available to you over a 20-year retirement if you were to retire with $500,000 in 2020 and follow the 4% rule (assuming a 2% inflation rate). If you followed this withdrawal schedule and your investment account earned an average 3% annual return throughout your retirement, your balance at the end of 20 years would be approximately $243,518.

Chart by author

Fixed-dollar withdrawals

Fixed-dollar withdrawals involve taking the same amount of money out of your retirement account every year for a set period. For example, you may decide to withdraw $20,000 annually for the first five years of retirement and then reassess.

The major benefit of fixed-dollar withdrawals is that you have a predictable annual income and can determine the amount to withdraw based on your budget in your first year as a retiree. However, there are substantial downsides. If you don’t increase your withdrawal amount, you’ll lose buying power over time as a result of inflation. And if you set your fixed-dollar amount too high, you risk running out of money in retirement.

The table below shows the approximate purchasing power of a $20,000 annual withdrawal over time (again assuming 2% inflation).

Chart by author

Fixed-percentage withdrawals

Fixed-percentage withdrawals involve withdrawing a fixed percentage of your account balance every year — for example, taking out 3.5% or 4% of your total invested funds every single year. With this approach, the amount you withdraw will vary as your investment account balance rises and falls.

This differs from the 4% rule both because you might choose a different percentage of your account balance to withdraw and because you keep the percentage the same every year instead of starting with a 4% withdrawal and adjusting upward based on inflation.

The major benefit of this approach is that this system naturally adjusts your withdrawals to respond to market fluctuations. Unfortunately, if you choose too large a percentage, you risk being left with too little money. Your income also changes from year to year, so it can be difficult to make financial plans.

Systematic withdrawals

Systematic withdrawals leave your principal invested throughout the entirety of your retirement. You withdraw only the income your investments produce from interest or dividends.

The major benefit of this approach is that you cannot run out of money in your retirement account. Unfortunately, your nest egg needs to be quite large to provide enough income for you to live on. Your income will also vary from year to year, depending on market performance. This again makes it difficult to create a financial plan. And if your investment gains don’t keep pace with inflation, you could see your buying power fall.

Buckets

When you implement a buckets strategy, you have three separate sources of retirement income:

• A savings account that holds approximately three to five years’ worth of living expenses in cash
• Fixed-income securities, including government and corporate bonds or certificates of deposit
• Equity investments

With this approach you draw from your savings account to cover your expenses and refill that “bucket” with money from the other two. This enables you to avoid selling assets at a loss. When you refill your savings account, you do so either by selling stocks if the market is up or selling your fixed income securities if they’ve performed well. If both stocks and bonds are down, you continue to draw from your savings.

The major benefit of this approach is that you have more control over when you sell investments and can potentially grow your investment account balance over time. However, it can quickly become time-consuming, and you still need to use another method to determine how much you can afford to spend each year.

M-Shwari lock savings account allows M-Pesa clients to set aside some funds for a specific purpose within a specified amount of time. This account is ideal for customers looking for high-interest rates and those that wish to keep their money safely for a period of between one to six months. The funds are kept in the account until the maturity date.

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Source: Getty Images

Most Kenyans know M-Shwari as a mobile loan application that allows them to access a quick loan when in dire need of emergency cash. However, they do not know that they can use their M-Shwari account to save money and earn interest. M-Shwari functions the same way as the bank savings accounts that are linked to the M-Pesa account.

How M-Shwari lock savings account works

To open and save into the lock savings account, you must be an M-Shwari customer. Follow this procedure to join M-Shwari and begin saving on the platform;

• Open the M-Pesa menu on your mobile phone
• Select the loans and savings option
• Choose M-Shwari and select Lock Savings Account
• Select to either save from M-Pesa or M-Shwari
• Enter the M-Shwari lock savings account target amount, which is the amount of money that you desire to save at the end of the maturity date.
• Choose the period between 1 and 6 months
• Enter the amount to save
• Enter the M-Pesa pin to complete the transaction
• You will receive a confirmation SMS that you have successfully set up your Lock Savings Account
• The next time you wish to save some money into the account repeat the above procedure.

READ ALSO: Savings challenge – learn how to keep your money locked till end of the year

M-Shwari lock savings account interest rates

The M-Shwari savings lock account interest rates calculator computes interest earned on a daily basis which is normally paid out on the maturity date set by the customer. Interest rates for the lock savings account are as follows;

• 3 percent per annum for savings of Kshs 1 – Kshs 20000
• 5 percent per annum for savings of Kshs 20001 – Kshs 50000
• 6 percent per annum for savings of more than Kshs 50001

M-Shwari lock savings account terms and conditions

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Source: UGC

Before you save money in the lock savings account, you must read and understand the terms and conditions governing the use and operation of the account. To accept the terms and conditions, click “Accept” on the M-Shwari menu that requests you to confirm that you have read, understood, and agreed to abide by the terms and conditions. You should click on “Decline” on the M-Shwari menu if you do not agree with the terms and conditions.

M-Shwari lock savings account withdrawal

Upon maturity, you will receive a notification SMS from M-Shwari informing you of the amount you saved and the interest earned. You should move the money from M-Shwari to M-Pesa then proceed to submit a withdrawal request.

Did you know that you can withdraw funds from the lock savings account M-Shwari before the maturity period? However, you can only receive the requested amount after 48 hours. Customers have the option of either withdrawing the entire amount “Break Lock” or making a partial withdrawal of the funds “Partial Lock”.

READ ALSO: M-Shwari: terms and conditions

Frequently asked questions (FAQs)

The following are some of the most FAQs that customers using the M-Shwari lock savings platform ask.

Do you earn interest when you save on M-Shwari lock savings?

Safaricom does not levy charges on the M-Shwari lock savings account. The savings account earns an interest of up to 7% per annum if the money is retained in the account until maturity. The interest is earned daily but is paid out monthly into the lock savings account.

What is the maximum amount that M-Pesa can hold?

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When withdrawing funds from your M-Shwari account, it is important to take note of the maximum amount of money that your M-Pesa account can hold. The maximum account balance that your M-Pesa account can hold is Kshs 100000. The maximum amount of money that you can withdraw from your M-Pesa account is Kshs 70000.

What is a fixed savings account?

A fixed savings account is similar to a savings account. The only exception is that you are denied access to the funds for an agreed period of time, which could be either one month, 3 months, 6 months or one year. The longer the money stays in the account, the higher the interest rates.

How much do savings accounts earn interest?

Savings accounts are offered by most banks in the country. The savings account allows people to keep their money in a safe place and earn a small amount of interest each month or year. The amount of interest earned on the savings varies among financial institutions.

READ ALSO: M-Shwari registration, loan application, limits, and interest rates

If you have some money that you want to save in an account that will earn you high-interest rates, then M-Shwari lock savings account should be on top of your list. You can easily withdraw your funds from your M-Shwari account at maturity. Do not panic if an emergency comes your way before the maturity date because you can still withdraw your money and get it after 48 hours.

READ ALSO: How does M-KOPA work?

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Savings accounts are a great place to keep cash: you earn interest, and the money is accessible if you need it, but how accessible is the money in a savings account? For example:

• Can you write a check from a savings account?
• How about making online purchases with that money?
• Can you set up recurring bill payments?

The answer to those questions is generally no. Banks don’t issue debit cards for savings accounts, and they rarely allow you to write checks for payments and purchases.

Why You Can’t Make Payments from Savings Accounts

Savings accounts are not designed for transactions. They’re meant for long-term storage of money. Because of that, federal law that sets limits for withdrawals made from savings accounts (Regulation D).

On April 24th, 2020, the Federal Reserve passed an interim rule to delete the six-per-month limit described below. As a result, customers can make unlimited withdrawals and transfers from savings accounts during the Coronavirus pandemic, but there is no official guidance on whether or not the rule will be permanent.   Check with your bank if you’re approaching the limit.

When you’re dealing with a checking account, you can make as many withdrawals as you want by writing a check, using your debit card, making electronic bill payments, or withdrawing funds. For a savings account, those types of payments, along with electronic payments and automatic transfers, are limited to six per month.   That explains why you can’t use a debit card or write checks from savings accounts or use them for online shopping. Without limits from your bank, you’d likely run over the federal limit, and your bank gets in trouble if you do that.

Savings accounts are limited to six withdrawals or transfers per month, but there’s no limit to the number of deposits you can make to them.  

Other Options

If you want an account that pays interest and also offers the ability to spend that money easily, you have a couple of choices: interest checking accounts and money market accounts.

Interest checking accounts are just what they sound like: checking accounts that pay interest on your cash—without the monthly transaction limit. Interest rates are often lower than what you can get in a savings account, but online interest checking accounts pay competitive rates.

Money market accounts are like souped-up savings accounts. They pay more than regular savings accounts, and you’re allowed to write checks from them—you might also get a debit card for spending. Just like savings accounts, you’ve got that six-per-month limit (some banks lower the limit to three), so these accounts aren’t for everyday use.   If you only need to write checks on your savings occasionally, they might meet your needs.

What You Can Do

The six-per-month rule doesn’t mean you have to make a trip to the bank to use money in your savings accounts. You get six chances to move out what you need for the month. Here are some ways to keep your cash accessible.

With a rising number of cloning cases of debit cards while using it to withdraw money from ATMs, the likes of State Bank of India, Bank of India, HDFC Bank, ICICI Bank, AXIS Bank etc. now allow the card-less cash withdrawal facility.

While taking out money from your account using the bank’s withdrawal form, it is mandatory to have a bank passbook in most cases. Also, you need to be present while withdrawing cash from your account. So, no one else can withdraw money from your account unless you give a written consent authorising another person to withdraw cash on your behalf.

This authorisation is allowed in the following cases: the account holder is sick, is a senior citizen or disabled and unable to visit the bank branch personally to withdraw cash. So, appoint an authorised person from your family or friends whom you trust on money matters.

Update your passbook and check the last few transactions just to be sure. In case you find an entry specifying a transaction you haven’t authorised, raise the concern immediately with the branch manager.

To ensure that only the person you have issued the cheque to is able to encash the amount, you should put a double cross line and write “A/C payee.” Such a practice is a precautionary measure to ensure that the money will be credited only to a bank account and not handed over to someone else.

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Do not share the debit card or the pin number with your friends or office colleagues. Also, do not write the pin number on the card itself. It’s better to memorise it. While making any transactions at ATMs, stand close to the machine and use your hand to shield the keypad as you enter the PIN.

With a rising number of cloning cases of debit cards while using it to withdraw money from ATMs, the likes of State Bank of India, Bank of India, HDFC Bank, ICICI Bank, AXIS Bank etc. now allow the card-less cash withdrawal facility.

Also, monitor suspicious transactions on your bank account. Notify your bank immediately if there has been a fraudulent transaction.

Here are the ways through which you can withdraw cash:

1) Using ATM: The most easy way to withdraw money from your bank account is by using an ATM. You can use a Debit card or an ATM card; each is associated with a different type of bank account.

To withdraw money from an ATM:

-Traditionally, you will need a card to use an ATM, but some banks provide other options.
-Insert the card into the slot on the machine.
-Enter your four digit PIN (Personal Identification Number)
-Navigate options either using the touch screen or with the number keypad.
-Most accounts have daily withdrawal limits, and most machines only dispense cash in multiples of 100.

-Remember that while ATMs owned by your bank normally don’t charge to use them, if you use an ATM outside of your bank’s network, you can be charged varying amounts for a transaction.

2) Withdraw money from ATM without a Debit card: Some banks allow you to withdraw money from ATMs in other ways. If you lose your card or it’s stolen, many banks will allow you to access ATMs without it through mobile apps, online accounts, or withdraw money within a branch by speaking to a teller and it also depends on your bank and how integrated they are with new technology.

3) Withdraw money from the bank in person: You can also withdraw money by going into a branch and talking to a bank teller. Most of the time, just like an ATM, you’ll need the card associated with the account you wish to draw from, as the teller will run the card, and also request that you enter your PIN, to access funds. This can take longer, but has the benefit of presenting a real person to talk to if you have questions or any problems arise with the account.

If you have lost your card, it’s been stolen, or you don’t have it for any other reason, the easiest way to access funds is to talk to a teller. The bank may have processes for allowing you to access your accounts without a card using personal identification numbers or other unique codes set up in the case of lost cards.

Even if you simply forgot your card at home, a teller may be able to access your account with personal identification.

4) Online Banking: Most banks these days give you access to your accounts through online services, and you can use that service to pay bills directly from your accounts. Many billing companies will allow you to set up automatic transactions from your bank, so that you don’t have to remember to pay directly. This isn’t so much withdrawing money as it is a payment option.

5) Mobile Apps: This one depends on your bank. Some banks allow you to use your mobile device at ATMs in place of a card, and you can usually access all the regular online banking options through a mobile app as well.

6) Cheques: Cheques are another way to directly pay someone from your bank account without a card. Before debit and credit cards existed, checks were one of the primary ways, other than cash, to pay people. They’re not often used today, with most people choosing quicker and easier digital alternatives to provide payment, but cashing checks is sometimes required by certain entities.

Banks charges: After three free withdrawals in a month, a withdrawal transaction charge will be charged at a flat fee of Rs 150 for a loan account.

Similarly, in case of savings account, customers can withdraw for free only thrice a month, after which a fee of Rs 40 will be charged on each transaction.

Jan Dhan account holders have some relief here, which means that while they will not be charged for fee deposits, these account holders will have to pay a fee of Rs 100 only for withdrawal.

Additionally, no relief will be provided to senior citizens.

February 22, 2016 / 5:30 AM / MoneyWatch

Let’s say you’ve been a smart parent when it comes to saving for your child’s education expenses by setting up a tax-advantaged education savings accounts, either a popular 529 college savings plan or the lesser known Education Savings Account (ESA).

But when it comes time to start paying those expenses, you need to know the rules for taking withdrawals and avoiding taxes. After all, the whole point is that money saved in these accounts is tax-free when withdrawn for certain education expenses, known as a Qualified Education Expense, or QEE, as specified in IRS Publication 970.

It’s important to note that the rules differ for ESAs and 529 plans. Unlike 529s, tax-free withdrawals from ESAs for qualified expenses aren’t limited to college or other postsecondary programs. Costs for elementary or high school education also qualify.

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Another difference: 529 plans have no deadline or age at which money must be distributed. But money in an ESA must be distributed before the account beneficiary reaches age 30. If not, the portion of the balance representing earnings will be taxed as income and subject to an additional 10 percent penalty tax.

For these reasons, parents who have money in both an ESA and a 529 plan should withdraw from an ESA first.

Tax-free ESA withdrawals can be made for a beneficiary’s costs for tuition and fees, room and board as required by a school, academic tutoring and even computers and Internet costs. Also, when required by the school, the costs related to transportation, uniforms and services are eligible.

Tax-free distributions from 529 accounts can also pay for qualified higher education expenses, or QHEE. These include tuition, fees, books, supplies, equipment and the additional expenses of a “special needs” beneficiary. For students who are pursuing a degree on at least a half-time basis, this also includes a specified amount of room and board.

Here are some commonly incurred expenses that don’t qualify:

• Insurance, sports or club activity fees, and many other types of fees that may be charged but aren’t required as a condition of enrollment.
• A computer, unless the institution requires that students have their own.
• General transportation costs.
• Repayment of student loans.
• Room and board costs in excess of the amount the school includes in its “cost of attendance” figures for federal financial aid purposes.

If the student is living in a school-owned dormitory, you can withdraw the amount the school charges for room and board. If the student is living off campus, ask the financial aid department for the room and board allowance for students living at home or elsewhere off campus.

You’ll also have to consider the coordination rules for taking tax-free education account withdrawals and claiming education tax credits. You can’t declare educations costs for either the American Opportunity tax credit or the Lifetime Learning credit and also take tax-free withdrawals from a 529 or ESA. Because the tax credits are more valuable and apply to the first $4,000 of education expenses, you should use those first, then pay for remaining expenses with education account withdrawals.

Finally, if you do withdraw more than the amount that covers qualifying education costs, and it’s less than 60 days since the withdrawal, you can deposit the excess amount into another 529 account, and it will no longer be treated as a taxable distribution.

Otherwise, the excess withdrawal is a nonqualified distribution. You or your beneficiary (you get to choose who receives the money) will have to report taxable income and pay a 10 percent penalty tax, but only on the earnings portion of the nonqualified distribution.

First published on February 22, 2016 / 5:30 AM

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