As a general rule, financial advisors suggest having around six months of living expenses in an emergency fund in a bank account — just in case. But no one likes to have money just sitting around earning next to nothing, so many people choose to put their stash in an online savings account, which can pay way, way more interest.
The downside of an online savings account is that you can’t walk into a branch to make a withdrawal. Some online accounts offer ATM cards or checks, making it relatively easy to get at least some money out quickly. However, ATM withdrawals are usually subject to daily limits. If you have both an online savings account and checking at the same financial institution, transfers are usually instantaneous. But not all accounts have these options.
So how do you get your cash?
Many people who have their emergency funds in an online savings account have to transfer the money to their normal, brick-and-mortar bank, then take the cash out there.
“Generally, it takes 24 to 48 hours,” said Greg McBride, SVP and chief financial analyst at Bankrate.com. “It could be 72 if it falls over a bank holiday.”
These transfers work via the Automated Clearing House system, which processes batches of transactions for banks. How often banks send and receive batches can vary slightly from bank to bank, and if you’re transferring from one to another, the speed will depend on the slowest.
Need your money faster? Many online savings banks will wire funds to another bank for a fee, and the funds usually take around half a day to arrive.
Yahoo Finance asked a few of the most popular banks how long transfers take:
Barclays (BCS) said its popular account usually takes two to three days for ACH transfers and offers no wire version.
CIT (CIT) said its transfers typically take about five days because of its fraud protection systems; wire transfers take 24 to 48 hours, barring delays.
Synchrony Bank’s (SYF) online FAQ notes that it can take up to four days for transferred funds to become available. (The bank’s VP declined to comment on timing of transfers.)
Ally Bank (ALLY) told Yahoo Finance that 78% of ACH transfers are completed on the next business day, and the rest within three. Quicker wire services, generally same day, are also available for a fee, provided the cut-off time is met. The bank also noted that with Zelle, inter-bank transfers occur within minutes. (Though Zelle will have a tough time challenging Venmo with peer-to-peer payments, it might prove very useful for a person’s own accounts.)
For most people, the slower speed may be irritating but rarely critical. “It’s a common objection, but how often do people actually have to pay cash?,” said McBride, who noted that a credit card could take care of many emergency situations and be paid off when the emergency fund money comes becomes available after a transfer. “If you have a few grand to put in an online savings account, you probably have a credit card.”
But you can’t use a credit card for everything, of course, and McBride points to one key example: investing. If you’re looking to put money—probably not your emergency fund, but extra cash—into the market at a moment’s notice, online savings accounts are not the place to house that cash. “That money is better kept in a [settlement or money market] fund with your brokerage firm,” he said. “But that’s really the only money you want to keep in that money fund, because the yields are so uncompetitive.”
It goes both ways
The slower speed of bank-to-bank activity is important to note, however. For instance, if someone wants to start an online savings account that relies on ACH infrastructure, knowing that it may take up to 72 hours can cause significant worry, McBride told Yahoo Finance.
“[Take] someone who’s making a deposit to an internet bank and is a little nervous. They make the deposit, transfer from current checking account, and it takes a couple days to show up,” said McBride. “Those days between they may cause their pulse to accelerate. It pays for people to know.”