Last time I wrote about How To Deposit Cash To Online Bank Account. This time I’m writing about the opposite: when you use an online bank for your main checking account, how do you withdraw cash, especially a large amount?
If you answer ATM or cash back with debit card purchase at a store, that’s too easy. There is a limit on how much you can withdraw from ATMs in a 24-hour period. It’s usually $500 or so. There’s also a limit on how much cash back you can get with each purchase at a store. What if you need more?
You may ask why would you need more than $500 in cash. Maybe you are buying something on Craigslist and they only want cash. Maybe you are taking the cash overseas because the mighty dollar is the preferred hard currency there.
It would be cheating if you transfer the money to a local, brick-and-mortar bank account before withdrawing it there, because then you are not withdrawing cash from an online bank account. You are withdrawing from a local, brick-and-mortar bank account. The whole point of using an online bank for your checking account is not having to keep an account at a local, brick-and-mortar bank, although you could have a local bank account that’s better than free if you are with the right bank (see previous post A Basic Checking Account That Pays More Than A High Yield Savings Account).
Answer: Debit Card Cash Advance
I don’t know if that’s the official term but that’s what it is. You walk into a bank, any bank or credit union; you don’t need an account there. You tell the teller:
“I’d like to take a cash advance against my Visa card.” (or MasterCard, if your debit card is a MasterCard)
Don’t mention it’s a debit card. You will only confuse them. As long as the card carries a Visa or MasterCard logo, they will do it the same way whether it’s credit or debit. They will ask for your ID. Then they will run your card on a terminal. It’s very similar to how you swipe your card when you buy something at a store. You sign the slip before they give you the cash.
The bank doesn’t charge you a fee just as a store doesn’t charge you a fee when you buy stuff. Think of it as buying cash. In fact the bank that gives you the cash advance will earn a fee from your bank for their service. So they happily do it for you.
There is a dollar limit for this as well, but it’s much higher than the daily ATM withdrawal limit. The limit on my account is $2,000 per day. If you want to find out what your limit is, ask your bank about the daily purchase limit on your debit card. Don’t ask the customer service rep about cash advance against the debit card. They often don’t know about it. When I asked my credit union about it, the service rep told me it was not supported although I did it several times already.
As far as your bank is concerned, the cash advance looks just like a purchase. Theoretically it’s possible for a bank to block cash advance on debit cards but it’s rare. Before you rely on it for a large withdrawal, try it for $100 first.
[Photo credit: Flickr user Minneapolis Institute of Arts]