Most savings accounts have no penalty for withdrawals, but your bank may charge a fee if you exceed a withdrawal limit
Whether you face a penalty depends on the type of account and your bank's rules, not on the act of withdrawing money itself. A standard savings account lets you withdraw as much as you want whenever you want, with no penalty. However, your bank may charge a fee — usually $10 to $35 per transaction — if you make more than a certain number of withdrawals in a month, typically six.
Some accounts, like money market accounts or certificates of deposit (CDs), have stricter rules. A CD charges a substantial early withdrawal penalty if you take money out before the maturity date — often three to twelve months of interest, or a percentage of the principal. Money market accounts may also limit your withdrawals and charge fees if you exceed that limit.
The key is knowing what type of account you have and what your specific bank's withdrawal policy states. This information appears in your account agreement or on your bank's website under the account details.
Key Takeaways
- Standard savings accounts have no withdrawal penalty, but many banks charge a fee if you make more than six withdrawals per month.
- Certificates of deposit (CDs) charge an early withdrawal penalty — typically several months of interest — if you withdraw before the maturity date.
- Money market accounts may limit withdrawals and charge fees similar to savings accounts if you exceed the limit.
- Your bank's withdrawal rules and fee amounts are listed in your account agreement or on the bank's website.
- ATM withdrawals, debit card transactions, and in-person withdrawals usually count toward your monthly withdrawal limit.
How the six-withdrawal limit works
Federal rules once capped savings account withdrawals at six per month, but that rule was suspended in 2020 and has not been reinstated. However, many banks still enforce their own six-withdrawal limit and charge a fee — typically $10 to $35 — when you exceed it in a calendar month.
What counts as a withdrawal varies by bank. Most banks count ATM withdrawals, debit card purchases, transfers to another account, and in-person withdrawals at the teller window. Some banks do not count transfers to your own checking account at the same bank. Check your account agreement or call your bank to confirm what counts toward your limit.
If you regularly need to withdraw more than six times per month, ask your bank whether they offer a savings account with no withdrawal limit, or whether switching to a checking account makes sense for your situation.
Early withdrawal penalties on certificates of deposit
A CD is a savings product where you agree to leave money untouched for a set period — usually three months to five years — in exchange for a higher interest rate. If you withdraw the money before that date ends, your bank charges an early withdrawal penalty.
The penalty amount varies widely. Some banks charge a flat fee of $25 to $50. Others charge a percentage of your deposit or a number of months' worth of interest. For example, a bank might charge six months of interest, meaning if your CD was earning $100 per year, the penalty would be $50. On a longer-term CD, the penalty can be substantial — sometimes $200 or more.
Before opening a CD, read the disclosure document to see exactly how the penalty is calculated. If you think you might need the money before the maturity date, a regular savings account is safer, even if the interest rate is lower.
Money market accounts and withdrawal restrictions
Money market accounts sit between savings accounts and checking accounts. They typically offer higher interest rates than savings accounts but come with withdrawal limits and sometimes a higher minimum balance requirement.
Many money market accounts limit you to six withdrawals per month and charge a fee — usually $10 to $25 — if you exceed that limit. Some banks also require a minimum balance, such as $2,500, and charge a monthly fee if your balance drops below it. A few banks have removed withdrawal limits on money market accounts, so check your account terms.
Money market accounts are useful if you want to earn more interest than a savings account offers but do not need frequent access to your money. If you need to withdraw regularly, a checking account or a high-yield savings account with no withdrawal limit may be a better fit.
What happens when you exceed your withdrawal limit
When you make a withdrawal that exceeds your bank's limit, the bank charges a fee to your account. This fee is deducted from your balance, reducing the amount you have on hand. The fee appears on your monthly statement and counts as a transaction fee, not as interest or a penalty on the withdrawal itself.
If you exceed the limit multiple times in one month, you may be charged multiple fees. For example, if your limit is six withdrawals and you make eight, you might be charged two fees of $10 each. Some banks cap the total fees per month, while others do not.
If you repeatedly exceed the withdrawal limit, your bank may close the account or convert it to a checking account. This is rare, but it can happen if the bank views your usage as inconsistent with a savings product.
High-yield savings accounts and withdrawal limits
High-yield savings accounts offer interest rates significantly higher than traditional savings accounts — sometimes 4% to 5% annually, depending on current rates. Most high-yield accounts are offered by online banks and have no withdrawal limit and no monthly fee.
Because these accounts have no withdrawal restrictions, they work well if you want both a higher interest rate and the ability to withdraw money whenever you need it. The trade-off is that online banks typically do not have physical branches, so withdrawals happen by transfer to another bank account or by ATM if the bank is part of an ATM network.
If you are currently paying fees on a traditional savings account because you withdraw frequently, moving to a high-yield savings account with no withdrawal limit could save you money even if the interest rate difference is small.
How to avoid withdrawal fees
The simplest way to avoid fees is to keep your withdrawals within your bank's limit. If your bank allows six withdrawals per month, plan your cash needs so you withdraw no more than six times. Combine multiple needs into one trip to the ATM or one visit to the bank.
If you need more frequent access to your money, switch to an account with no withdrawal limit. Many online banks and some traditional banks offer high-yield savings accounts or checking accounts with no restrictions. Compare the interest rates and fees across a few banks before you move your money.
For CDs, only deposit money you know you will not need before the maturity date. If you are uncertain, choose a shorter CD term — three or six months instead of one or two years — so you can access your money sooner without a large penalty.
Frequently Asked Questions
Can my bank charge me a fee for withdrawing my own money?
Yes, if you exceed your bank's withdrawal limit. Most banks allow six withdrawals per month and charge a fee of $10 to $35 for each withdrawal beyond that. This is a bank policy, not a law, so different banks have different rules. Check your account agreement to see your bank's specific limit.
What is the penalty for withdrawing from a CD early?
The penalty varies by bank and CD term. Common penalties are a flat fee ($25 to $50), a percentage of your deposit, or a number of months' interest. A longer-term CD usually has a larger penalty. Read your CD disclosure before you open the account to know the exact penalty amount.
Do transfers between my own accounts count as withdrawals?
Usually yes. Most banks count transfers from your savings account to your checking account or to another bank as withdrawals that count toward your monthly limit. Some banks exclude transfers between accounts you own at the same bank. Call your bank or check your account agreement to confirm.
If I close my savings account, do I have to pay a penalty?
No, closing a savings account has no penalty. However, if you close a CD before the maturity date, you will owe the early withdrawal penalty. Some banks also charge a small fee to close an account if you do it within a certain time frame, such as 90 days of opening it, but this is uncommon.
Can I avoid withdrawal fees by using a different bank's ATM?
No. Withdrawal fees are based on how many times you withdraw from your own bank, not which ATM you use. Using an out-of-network ATM may result in a separate ATM fee from your bank or the ATM operator, but it does not change whether you hit your withdrawal limit.