Many banks' debit cards allow you to select "savings" at ATMs for cash withdrawals, and it'll work just the same; I've confirmed this with a number of banks over the years. This is concerning because if your debit card is ever compromised and you have a savings account with the institution, your savings account/balance could be at risk too.
Since noticing this, my savings and checking accounts are at separate banks. Just thought I'd share the suggestion.
@DaveInAZ wrote:Or just never carry a debit/ATM card on you like I do. I never use debit, and on the rare occaisions when I need a cash infusion my Discover card gets me $60 cash "over" per day at grocery stores & Walmart and my Walmart store card gets me $100 cash over per day at Wallyworld. Pay both/either in full by the due date and no interest charge on the cash. I'm not good at storing numbers in my head so not a fan of ATMs.
Dave, I happen to do the same thing. I do actually carry my debit card around, but it is very rare that I use the ATM with it. I am in a habit of knowing ahead of time when I may need cash, and simply get it at the point of purchase with my Discover card.
It is true that a debit card requires a pin code, but that is only a layer of protection not a guarantee. Pin scammers are connected to ATM devices, stollen with the card by trusted family members etc...
However, another member mentioned the solution of not carrying a debit card, which can protect you from ATM pin scammers, and potentially pin/card theft if you never set up the pin. Another option is simply to request not to have the debit card or destroy it when you receive it. That is if you are worried about that sort of thing.
Still, I would like to mention for consideration a few more reasons to keep your savings and checking separate. After all, when we think in terms of fiscal security or investments in any other branch of finances, we usually think of terms like diversification. So here are a couple reasons I think diversity in holdings is a good thing.
Insurance. Everyone has heard their monies are FDIC insured up to $250k. FDIC insurance is standard on banks and credit unions for simple savings and checking accounts, CD's etc... So what do we have to worry about right? While it is true that a depositor has not lost a single cent (of FDIC insured funds) since the foundation of FDIC, that doesn't mean it's always been quick and painless. FDIC is relatively quick to act after the bank officially closes it's doors, but certain requirements must be met before then, such as attempting to sell off any and all accounts to a solvent institution. And for some accounts (trust etc...) The payout time can be even longer. Who wants to go without access to all of their money for even a week?
FDIC Misconceptions. This one really only applies to big holders, but there are a lot of misconceptions about how to increase FDIC insurance amounts, why take the risk, accounts in different institutions are always insured separately from one another.
Better Products. Not many people would argue against the fact that certain institutions are better at certain things than others. So when you use multiple institutions your not just diversifying the security of your holdings but also the products available to you.
Relationships. So long as you tailor your financial institutions to meet your financial needs and your financial operating capacity than you are not just diversifying the level of security and number of products but potentially the number of relationships. Admittedly, too much diversification can have the opposite affect, if you are barely moving money or have no face time with even one of the institutions, but if that's the case you are doing it wrong (see financial needs and operating capacity).
Finally,
Access. This isn't so much a reason to diversify so much as it is a reason to no longer, not diversify. With the advent of Zelle and Venmo (so going as you are comfortable, confident, and competent in there use) have really cut down the wait time and difficulty of moving currency from one institution to another. Some might think this cuts down on the relationship with the bank by removing the face to face time, and that's OK, some degree of face time with already one of your institutions is imo important. Moving money however is something that I would argue also builds relationships (especially with the large feel institutions). After All, a kind face and a sad sob story won't generally get you far with these guys because all niceties aside, the, they are more in love with your money if we are being honest.
However, another member mentioned the solution of not carrying a debit card, which can protect you from ATM pin scammers, and potentially pin/card theft if you never set up the pin. Another option is simply to request not to have the debit card or destroy it when you receive it. That is if you are worried about that sort of thing.
Still, I would like to mention for consideration a few more reasons to keep your savings and checking separate. After all, when we think in terms of fiscal security or investments in any other branch of finances, we usually think of terms like diversification. So here are a couple reasons I think diversity in holdings is a good thing.
Insurance. Everyone has heard their monies are FDIC insured up to $250k. FDIC insurance is standard on banks and credit unions for simple savings and checking accounts, CD's etc... So what do we have to worry about right? While it is true that a depositor has not lost a single cent (of FDIC insured funds) since the foundation of FDIC, that doesn't mean it's always been quick and painless. FDIC is relatively quick to act after the bank officially closes it's doors, but certain requirements must be met before then, such as attempting to sell off any and all accounts to a solvent institution. And for some accounts (trust etc...) The payout time can be even longer. Who wants to go without access to all of their money for even a week?
FDIC Misconceptions. This one really only applies to big holders, but there are a lot of misconceptions about how to increase FDIC insurance amounts, why take the risk, accounts in different institutions are always insured separately from one another.
Better Products. Not many people would argue against the fact that certain institutions are better at certain things than others. So when you use multiple institutions your not just diversifying the security of your holdings but also the products available to you.
Relationships. So long as you tailor your financial institutions to meet your financial needs and your financial operating capacity than you are not just diversifying the level of security and number of products but potentially the number of relationships. Admittedly, too much diversification can have the opposite affect, if you are barely moving money or have no face time with even one of the institutions, but if that's the case you are doing it wrong (see financial needs and operating capacity).
Finally,
Access. This isn't so much a reason to diversify so much as it is a reason to no longer, not diversify. With the advent of Zelle and Venmo (so going as you are comfortable, confident, and competent in there use) have really cut down the wait time and difficulty of moving currency from one institution to another. Some might think this cuts down on the relationship with the bank by removing the face to face time, and that's OK, some degree of face time with already one of your institutions is imo important. Moving money however is something that I would argue also builds relationships (especially with the large feel institutions). After All, a kind face and a sad sob story won't generally get you far with these guys because all niceties aside, the, they are more in love with your money if we are being honest.
Starting Score: EQ:791 | TU:785 | EX:781
I have what I called a tiered savings strategy I keep $500 in my checking account that I do not include in my running balance that I can access quickly if needed. I keep $1500 in a local CU (not where I have my checking) that I can get to easily, but not as easy as the cash in my checking. I keep savings for things like down payment on car, cash I am holding for DD, charitable donations, and vacations in a Money Market earning higher interest than other Checking and Savings. I then keep my true emergency savings in 5 CDs with one CD maturing each year, so that when one matures this year I can roll it over to a 60 month, rinse and repeat. If I need this money I might lose some interest in a penalty, but I am OK with that as this is money I don't want to touch.
Edited to add: I acutally have 2 checking accounts that hold an extra $500 each. So in reality I have easy access to $2500 in cash if I need it quickly.
@Blodreina wrote:Many banks' debit cards allow you to select "savings" at ATMs for cash withdrawals, and it'll work just the same; I've confirmed this with a number of banks over the years. This is concerning because if your debit card is ever compromised and you have a savings account with the institution, your savings account/balance could be at risk too.
Since noticing this, my savings and checking accounts are at separate banks. Just thought I'd share the suggestion.
What “Catch Me If You Can” Frank Abagnale Says About Debit Cards
“I don’t have (a debit card),” says Abagnale.
“I use only credit cards, because if somebody gets my card number and charges $1 million, my liability—by federal law—is zero.”
“But when you use a debit card, you’re exposing the money in your account. And even if you use your debit card every day for the next 25 years, it won’t raise your credit score one point.”
