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Key Highlights
- The cash withdrawal limit varies depending on the transaction type. For instance, a self-cheque withdrawal limit is different from ATM withdrawal limits.
- Withdrawal limits encourage savings and you can potentially earn interest on your money by keeping it in your account rather than simply withdrawing it.
- If you anticipate a need for funds beyond the withdrawal limits, explore temporary or alternative arrangements with your bank.
Imagine this - you usually go to an ATM (Automated Teller Machine) to withdraw money and enter the desired amount on the keypad. However, in this instance, you get a message that the entered amount exceeds your withdrawal limit.Wondering why this happened? Well, banks set a certain withdrawal limit and being aware of these limits helps you plan your withdrawals and avoid such inconveniences. In this blog, we decode the cash withdrawal limit to help you manage your withdrawals effectively.
Why Is there a Cash Withdrawal Limit?
The cash withdrawal limit on your savings accounts serves multiple purposes, including security. If fraudsters get access to your account, they would want to transfer all your hard-earned savings into their account, leaving you with no money. Thanks to the withdrawal limit, they can only withdraw up to a certain amount.A cash withdrawal limit also encourages you to save. Instead of taking out money, you can potentially earn more interest by keeping it in your account. Additionally, such withdrawal limits help banks maintain liquidity.
What Is the Cash Withdrawal Limit?
The cash withdrawal limit varies depending on the transaction type. For instance, a self-cheque withdrawal limit is different from ATM withdrawal limits. Let’s understand these limits one by one:
Self-Cheque Withdrawal Limit
Self-cheque withdrawal limit indicates the maximum amount of money you can withdraw from your savings account using a self-cheque.Banks usually set a self-cheque withdrawal limit of ₹1-2 lakh per day. You should check with your bank the limit applicable in your case. It is important to check this limit in advance to avoid inconveniences when you want to withdraw large sums from your account.Thus, plan your withdrawals within the self-cheque withdrawal limit to ensure seamless access to your funds.
ATM Withdrawal Limit
After learning about the self-cheque withdrawal limit, let’s move to the next type, i.e. ATM withdrawal Limit.The amount of money that you can withdraw from an ATM depends on your account and varies from bank to bank. For example, some banks may cap your daily withdrawals to ₹25,000. Thus, you should always check the withdrawal limit with your bank at the time of getting the card itself. Also Read: Credit Card Cash Withdrawal: Limits, Charges & Interest Rates
What Factors Determine Your Cash Withdrawal Limit?
The cash withdrawal limit depends on several factors. Let’s delve deeper:
Type of Account
The cash withdrawal limit depends on your account type. Typically, the withdrawal limit is lower in the case of basic savings accounts. Whereas, if you hold a privileged savings account, you can expect the withdrawal limit to be higher.Before opening a savings account, talk to your bank to understand the eligibility and key account features. Knowing these along with the cash withdrawal limit helps make an informed account-opening decision.
Branch and Non-Branch Transactions
Another important factor determining your cash withdrawal limit is the branch from where you are withdrawing.What usually happens is, banks allow a higher withdrawal if you withdraw funds from your home branch. On the other, if you withdraw funds from a branch other than your home branch, the withdrawal limits are normally on the lower side.
How Can You Manage Cash Withdrawal Limit Effectively?
You should manage your withdrawal limits, including your self-cheque withdrawal limit effectively to ensure a smooth banking experience. Here's how:
Familiarise Yourself with the Account Features
Even before you decide to open a specific savings account , fully understand its features. This will help you make an informed decision and abide by the relevant conditions, including the cash withdrawal limit.
Explore Alternative Modes
If a particular transaction surpasses the applicable withdrawal limits, explore other modes, such as cheque payments, digital wallets, etc. However, make sure to meet the applicable guidelines.
Reach Out to Your Bank
If you anticipate a need for funds beyond the self-cheque withdrawal limit, reach out to your bank to explore temporary or alternative arrangements.
Plan Your Withdrawals to Avoid Banking Inconveniences
Knowing the cash withdrawal limit helps plan your financial transactions effectively. Trying to withdraw over the set limits normally results in transaction delays or failures. To avoid such unpleasant experiences, consider using a credit card .Apart from offering you interest-free credit for a certain period, a credit card offers reward points and other benefits. Thus, credit cards go beyond avoiding the withdrawal limits and make your purchases rewarding. Also Read: Savings Account: Meaning, Types, Benefits & How to Apply
FAQS - FREQUENTLY ASKED QUESTIONS
Are there any restrictions on savings account withdrawals?
Yes, there are restrictions on withdrawing money from your savings accounts. You cannot take out money beyond the applicable withdrawal limit.
Why are there restrictions on withdrawing money from the savings account?
Withdrawal limits encourage savings and you can potentially earn interest on your money by keeping it in your account rather than simply withdrawing it.
What is the cash withdrawal limit in the case of a savings account?
The cash withdrawal limit depends on various factors like the account type, nature of transactions, etc. For instance, a self-cheque withdrawal limit is different from ATM withdrawal limits.
What do you mean by self cheque withdrawal limit?
The self-cheque withdrawal limit is the maximum amount of money you can withdraw from your savings account using a self-cheque.
What is the ATM withdrawal limit?
The ATM withdrawal limit indicates the maximum amount you can withdraw using your card at the ATM.
Does the withdrawal amount also depend on the account type?
Yes. Usually, the withdrawal limit is lower in the case of a basic savings account than a privileged savings account.
What about branch and non-branch transactions? Do they influence the withdrawal limits?
Yes. Banks typically allow a higher withdrawal if you withdraw funds from your home branch.
I may need funds exceeding the allowable withdrawal limit. What should I do?
In case you need funds exceeding the allowable limit, talk to your bank to explore temporary arrangements.
Why is it said that withdrawal limits also serve as a security check?
If fraudsters unfortunately get access to your account, they can withdraw funds only up to the cash withdrawal limit.
Can you tell me the exact amount up to which I can withdraw funds from my savings account?
As explained, the withdrawal limit depends on various factors. To understand the withdrawal limit in your case, talk to your bank for specific details.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
