Comment by pants2
20 hours ago
Not a great solution to constantly have to top up your checking account with some amount between "I need this much to pay my bills" and "losing this amount would devastating" which for many people has quite some overlap
You can pay bills from your savings account with ACH in the US.
Interesting perspective. So, if I'm understanding you correctly, the pitch here would be:
1. Paycheck DD → straight to savings
2. "Spending money" for in-person transactions → transfer periodically to checking
3. Use debit card to spend from checking.
That's an interesting idea. Actually what is intriguing to me is another angle: I'd still never consider spending with debit. But my problem is that it's essentially impossible to get an ATM card that isn't a debit card anymore, meaning if I want to be able to use an ATM, I have to carry this stupid card around that would be easy to use to drain my checking account. With your approach, if I can get a savings account that is not linked to a checking account, I could use that as my default place where I pay my rent and credit card bills from. But it's a big if, because a lot of savings accounts have limits on how many withdrawals they can have per month, probably a residue of that regulation that someone else said was recently repealed.
While Regulation D was lifted a few years ago, there are often still restrictions to the number of withdrawals one can do from a lot of savings accounts.
If most of your income comes from salary/wages, just have the paycheck first hit your normal checking account first and then have scheduled deposits from there into savings accounts someplace else. You generally have enough money in the account to cover your monthly stuff plus a bit of buffer, but have the pile of cash elsewhere in case something happens.
This way you're not actively having to top off your normal spending account, but at the same time have a backstop in case that active account gets hit by fraud or whatever.
I'd suggest protecting yourself even further and having those accounts be split across two different banks. This way if one of your bank credentials gets hacked or you have some issue with the bank you at least have a chance of still having an account with cash someplace else to cover the short term.