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Limit of 6 ACH Transfers on Savings Accounts
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There is a limit of six transfers, ACH or otherwise, per statement cycle on savings accounts as mandated by the Federal Reserve board Regulation D, which defines the rules of each account type and its reserve requirement. Why is this important? With the advent of online savings accounts and the chase for a better interest rate, ACH transfers into and out of savings accounts are becoming more frequent. Before online savings accounts like ING Direct and Emigrant Direct, when you actually had to visit a bank to initiate an ACH transfer; a limit of six transfers on a savings account wasn’t really a problem. In fact, you’d be hard pressed to initiate six in a year, let alone six within a statement month. Now, you can initiate six ACH transfers within a statement cycle without really realizing it and that can be cause to terminate your account!
The reason for this is because your savings account is classified as a “saving deposit” and the reserve requirement on a “saving deposit” is 0%, compared to something like 10% on a “transaction account.” A reserve requirement is how much of the balance the bank must keep in reserve and not give out in loans. So when Emigrant Direct gets your $1,000 in your saving account, it doesn’t need to hold any of that in its reserves, it can loan all thousand dollars because the reserve requirement on a savings account is 0%. (hence the attractive rates) On a checking account (a transaction account) however, they must retain 10% of the balance on hand because the assumption is you will be drawing on your funds more frequently.
So, why did I look this all up? Because when I was reading the Emigrant Direct’s disclosure statement (link), I stumbled upon this rule:
Federal regulations require that no more than six (6) transfers per statement cycle may be made to (1) an account at another bank or financial institution, including your External Account, (2) to another EmigrantDirect account or (3) to a third party by means of a preauthorized or automatic electronic transfer. We reserve the right to close your Account for violation of the above restriction.
This is nearly an exact copy of Section 204.2(d)(2) of Regulation D of the Federal Reserve Board’s definition of a “savings deposit:”
the depositor is permitted or authorized to make no more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle . . . to another account (including a transaction account) of the depositor at the same institution or to a third party by means of a preauthorized or automatic transfer, or telephonic (including data transmission) agreement, order, or instruction, and no more than three of the six such transfers may be made by check, draft, debit card, or similar order made by the depositor and payable to third parties. (reference)
So, be aware of the six transfer limit on online savings accounts or you might be in for a surprise!
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I agree that the limit of six transfers is to low. Today I found out that I had hit the limit and I now have too drive to the bank to use the ATM machine to transfer money. Whether I use the ATM, a teller or online banking the net effect is the same: money from my savings will go into my checking account. So where does this liquidity come into play? This would make sense if any type of transfer was limited but in this case my savings ACH will be lowered regardless of the method used.
This should be changed and the limit raised to reflect the reality of people doing more online banking. Inline with this I’d also like to see Banks not charge so much for overdraft protection. In my case the bank pulled money out of my savings to cover debit card use and I got nailed $25 per transaction. I think that is pretty excessive for the bank doing what I normally do at home on the computer. If a teller was involved then perhaps the fees might make some sense but when the banks computer automatically transfers money from my savings to my checking< I think $25.00 per is over the top.
I am amazed the ignorant comments keep coming after Anon succinctly stated the obvious. The simple solution to the 6 transfer limit is to deposit your salary into a savings account and automatically periodically transfer a lump sum into a checking account, where you can withdraw as much money as often as you’d like. Being the old fart I am, I remember having to pay checking account fees and per check fees.
If you are the typical American that carries perpetual credit card debt and lives paycheck-to-paycheck, then reverse the process. Deposit your salary into your checking account and make deposits to savings, and leave the money there as emergency cash. You will earn less interest in the long run, but you will not incur those terrible, unfair fees that penalize you for taking out your own money.
People claim they never heard of the withdrawal restriction because they never read the rules and regulations of their account,. They must have lied and clicked the box that states they did when they signed up. These people have no one to blame but themselves. Do they? Ha! They blame the evil banks, the gubmint, the President, etc.
Grow up, folks. Take responsibility for your actions. Practice capitalism and vote with your dollars. If you are dissatisfied with the products and services you receive, do business elsewhere. Don’t just whine about it.
This rule is good. Annoying, yes; but good. This is what allows banks to loan out all the money we deposit in our savings accounts so they can make interest on it, thus allowing them to give us greater interest in return. They have a better gauge of how much home they need to be held accountable for then on any given day. Take this a step further and you have CD’s where you tell the bank you won’t withdraw any of the money for a set number of months…any because of that you get a higher interest rate from the bank.
I just received information about this rule from the NCUA. While this online transaction limit is legitimate, it ONLY applies to money market savings accounts, NOT regular share savings account.
Well the way I am going to get around it is go to an ATM and transfer from tere, That doesnt count against the limit
I ran afoul of this rule for the first time earlier this year. Not only did I get a letter from Wells Fargo telling me that I better not do it again, but they dinged me $10 at the same time. Nice.
Oh, and when I asked why the feds have this policy, my bank told me it was put in place to help prevent money laundering. ??
Joke — same here with National City. I posted a big rant.
All, I just learned of this, and after googling many times tonight and actually thinking like folks here, I am doing what we all need to do, which is follow the money/politics. The top line is that the banks want to loan as much as possible as that’s how they make money. A good thing for all of us. The bank also wants FDIC to insure as much as possible, but like all government programs, the bank then has to answer to the government. So, the govt’ says they’ll insure transactional accounts as that, at the time, was measurable. Since online banking has evolved, savings accounts for us, the end-user, are now used as transactional accounts, and the banks did not evolve like we have, and can/did not report assets properly. Rather than fixing that problem and thus having the banks and the FDIC evolve and address the problem of personal banking improvements and habit changes at a consumer level, the banks allowed and decided that the GOVERNMENT would limit OUR transactions to allow better reporting to the FDIC from the banks. No — sorry, that’s rather that the BANKS need to limit transactions from us (sarcasm), the people, so that they sasify the government FDIC insurance regualtions in reporting. FDIC insures 90% of transactional accounts, so if we the people move our money to savings, the government won’t insure it (end-of-life result). That means the bank needs to have less risk as our savings is not insured. (it is from bank to us, but not from the government to to the bank). That means the bank needs to be smarter with who to loan money to. That’s why the BANK charges the fee for more than 6 transactions, and not the government. Your bank needs to report data to the FDIC for insurance purposes, and because we all move money online, they can’t track it effectively. Your bank is charging YOU for their own work-around to paying for FDIC insurance. If YOUR account appears as a transactional account, YOUR bank has to hold 10% of your money in “escrow (my term) as insurance…to get FDIC insurance. Accounts that have over 10% (or 6 transactions that some “numbers person” determined) activity or transfers in savings (non-transactional accounts) will be considered transactional accounts, so charged a fee or closed. Closed? Why? Because YOUR account is now a liabilty to the bank because they can’t loan money against yours. Why? Because the government says they can’t. Why? You need to google that as you will come apart. The government needs to get out of banking, and learn that certainty cannot be governed. Follow the money…when it ends with politics and not in your hands, it’s a bad thing.
Thank your government for the simple 6 transaction rule. Be fearful that you are not paying attention to what happened behind that regulation. Seems like a small thing, but read on and try to find a Tea Party with this in hand.
Even with this law the BANKS ARE FAILING. This law is a joke, its clear purpose is to make banks extra cash on certain transactions. It clear purpose is to limit the movement of money since big brother has to watch every transaction. If this was about liquidity, then what stops a run on a failing bank, certainly not this law. Personally I dont want to find out how FDIC insurance works, I just want my saving out before they close their doors because they made bad loans. Oh wait I forgot, the new solution is BIG BAILOUTS.
now that i will agree with you on anon, you speak sense right here, big bailot is a joke, does anyone know that our money is just a note and that ote is debt with intrest! geuss not
A federal reserve NOTE is not our money, its not anything. Boycott the FED!
H….E…..L….L…. YES WE DO
A federal reserve NOTE is not our money, its not anything. Boycott the FED!
I just got burned by this. I keep all my money in my savings account until I need to use it, because if it’s in my checking account I’ll spend it. So I transfer funds to my checking whenever I set up online bill payer to pay a bill, or when I know I will need to get money from the ATM. I’m lucky that my credit union is only charging a dollar and not shutting me down. But my representative told me to just make a lump sum transfer (why is that better?) or if I call the credit union and they transfer the money, that’s okay too. She also said that they only started enforcing this as of Jan 1 2009 since the Feds started enforcing it. Something about how the Feds think that more than 6 transfers out of savings is a sign of money laundering? Silly me for wishing they would have informed their customers.
[...] or transfers per statement cycle. This limit is true on all savings accounts because there is a six transfer/withdrawal limit mandated by federal regulations. So many people, myself included, run into this problem with online accounts and it’s mostly [...]
Come on. This rule is ridiculous. I can take transfer $2000 out of my savings at once and that’s just fine, or transfer it in small chunks as needed (which I did), and get smacked for it. What difference does it make if it’s all at once or as needed? The bottom line is still the same. And why is an online transfer different than walking into the bank or going to the ATM. Most important, how do we get this changed?!!!!
Anyone find out how to make this change? It is ridculous to be charged for moving YOUR OWN MONEY b/t savings/ checking.
I guess they don’t want anyone to SAve ANYMORE. jUST YANK OUT ALL YOUR SAVINGS AND SEE WHERE THAT LEAVES THE BANK! CHASE BANK, HOW LATE ARE YOU OPEN TODAY????
It used to be four. Share account do apply. That is why I get a checking account with no interest at a bank and no money market account. One comment, withdrawing the money directly from the teller or your banks atm is not suppose to count against the 6 withdraw limit.
However, I think they are trying to change this rule. Small debit card transactions under $50 maybe allowed without restriction. The rule has not changed yet.
it’s disgusting how strangers on the internet are telling other strangers on the internet to “grow up”. you’re not an authority figure or anyone here’s parent. while you may be more responsible with your money, you’re also an asshole who thinks you’re better than others because you read all the fine print and know and follow all the rules like a good little consumer lapdog. fees like this and overdraft fees are completely out of line and have no purpose. the bank or government has no place to tell us how to handle our money. if i want to transfer a dollar a day from savings to checking i should be able to. charging me for doing that “too many times” is criminal.
what is the fee if you go over 6 transfers? bc i just got the letter to and im about to go to the bank to close my savings.
It would depend on your bank but they use it more as a deterrent than a revenue source. They’re not supposed to let you do it and if it happens too often, they’ll close your account.
What a load of crap!!!!! So I can go into the bank 15 times a month and make transfers from savings to checking and that’s okay, but God help me if I have a emergency, am in the red, etc. and the transfer is done ELECTRONICALLY!! The only difference does it makes is that I have to get in my car and walk into the bank, making it much more inconvenient for me!!!!
You should be able to transfer from your savings to your checking at the same bank without a problem, it’s only if you transfer it from your savings to another bank.
Sorry Jim, that is not true. I also just received a letter and I am one transfer away from having my account closed. I have only transferred money from my savings account to my checking account at the same bank. I have my check direct deposited into my savings and I transfer just enough money to my checking to cover my bills. I am afraid to keep too much money in my checking incase my bank card gets stolen. I agree with most people on here that this law is very out of date, (and a bit too controlling there Big Brother!). Not only is online banking the norm, but with all of the identity thefts going on, everyone is trying to keep their money as safe as possible. For me that means keeping a bare minimum in my checking. I do understand the reasoning, but 12 transfers a month seems more reasonable.
No. Transfers out of savings to any other account whether within your own bank or another bank still counts. Though the 6 limit makes a lot of sense and I agree with it.
I just got hit with $180 in fees ($15 per transaction) for moving money from my US Bank savings to my US Bank checking. They won’t do a thing about it either.
DUDE I KNOW HOW U FEEL, they popped me for freaking 230 buks! this rule is stupid, ive already made my point above, man us bank got a nice yeellliiinnnggg lecture from me today
I just got a note too. It was from E-trade related to savings account. I have never transferred money out of e-trade just transferred to my e-trade brokerage account from my e-trade savings account . They did not mention a penalty or any threat. Just I need to not do more than 6 transactions
WTF? We’re supposed to “save” our money, then not have access to it whenever we need it??? What is this crap? This is the LAST time I will deposit $20000 in my “savings” account for use when I need it. I will be closing out my account and taking the money IN CASH to use as and when I see fit! This is MY hard-earned money and I WILL do whatever I want with it!!!!!!!!!!!!!!!!
The 6 transactions limit applies to electronic transactions. If you go inside to a teller and withdraw money it is unlimited. Verify this with a bank official before you do it. If you go ahead a pull your money out. I would only take out $5,000 a week. Not all at once. Otherwise, you would have to fill out a special irs form.
If you have a savings account with Bank of America it doesn’t matter if you do withdrawals online or in person. You are only allowed to do 3 in a statement cycle. After the 3 they charge $5.00 per withdrawal.
Now if they use your savings account for overdraft protection BofA also charges your savings or checking acct. $10.00 per transaction. Plus the overdraft fee of $35.00.
And BofA did not announce that they were changing the monthly fee that they charge to your savings acct. which was $3.00 to $5.00, this went into affect when the bank had to pass that Federal Stress Test.
BofA along with the other banks did bad loans on the housing market & now they are trying to recoup their losses through fees. They do that enough times with enough people they will recoup those losses plus more. Not to mention they get to pass the Federal Stress Test with flying colors. And they are also enforcing the limit on savings accts. or they will change your savings acct. into another checking acct. where they can collect even more money on monthly maintenance fees. Which they are doing to me, so I’m going to close out the acct. before they can collect any more fees from me. I refuse to pay $10.00 per month for the bank to do nothing more than watch a computer screen on individual accounts.
It’s now our fault that the banks gave out bad loans on housing mortgages especially since they more than likely knew that alot of those loans were going to go belly up in the near future. (Variable rates: where the interest rate fluctuates, usually going up more than down, like flowing water. I didn’t see too many mortgages on fixed rates. So the banks knew that people were going to have problems on their mortgage payments very, very soon.) That’s the bank’s fault not mine or anyone elses. We shouldn’t have to pay for what happened. Not to mention, what happened on Wall Street, which that is the nature of the beast when you gamble with money.
And the banks want to regulate our finances & they say they are taking care of us, as their customer, they can’t even take care of their own finances.
Credit Unions, as I’m finding out, are not much better than banks. You have to have A-one credit to get a debit/visa card from them. If one doesn’t have that kind of credit then the only thing they are giving out is ATM cards (only) & if you want to do online banking then you are out of luck. Not to mention, if you use your debit/visa for purchases then you can’t do that either. I live in Tucson, Az. & 99.9% of the businesses no longer take checks for transactions. Debit or cash only. And that is starting to change to cash only because businesses are tired of paying the banking fees on those debit card purchases. And our credit unions in this city only allow 3 ATM withdrawals any more than that & you get charged a fee.
The banks & credit unions are just plain money hungry for your money. They don’t see that if it wasn’t for the customer opening those acct. they wouldn’t be in business.
You need to notify BOA, you are allowed unlimited withdraws of savings, money market from a teller and also from the banks atms-at the banks branches. The 6 withdraw limit applies if you do it online, or in a store, or a non BOA atm or atm not located at bank branches/main offices.
I just did about 15 transfers this month, and didn’t notice that I had gone over till recently. I live overseas but my account is in America, so it takes a while before I get any correspondence from my bank. The reason why I did so many transfers is because I keep the majority of my money in my savings account and withdraw money from the ATM through my card that is linked through my checking account, and do transfers as I need the money. I figure it is safer to keep as little money as possible in my account linked to the card in case someone gets the details. This rule will cancel out my security measures because I won’t be able to do that anymore. I had to get a lot of money out quickly because I am looking for a new apartment and they want 6 months up front. I was also planning on buying a car. By the way, I agree with jimmydageek being an asshole, and he is probably definitely a geek. At least he recognises that he is defective.
My beef with the policy (which I don’t like, but which I do understand) isn’t so much with the policy but with the lack of clear disclosure by my bank. Unlike a CD, whose limits are clearly disclosed when the CD is purchased, there was no clear disclosure of this policy when I opened my savings.
I’ve been with Chase since it was Irving Trust–nearly 30 years ago. I was notified of this for the first time about 2 months ago. I called and the representative explained what I took to mean if I withdrew money from CHECKING, it was fine, but not savings. I asked him if, in that case, I could transfer money from Savings to Checking and then withdraw and he said definitely. Well, I got another notice yesterday, threatening all sorts of stuff if I did it again. My question is this: Are they telling me that IN 30 YEARS I never went beyond this and now, suddenly, I’ve done it twice in a couple of months?? I never exceeded the withdrawals when I bought my house or other check-intensive months?? They claim it was included in the rules & regulations when I first opened the account. Garbage. So my major complaint is that they seemed to have kept this very quiet if it was instituted over the past few months. What a nightmare.
I just moved into a bigger apt after saving for the last 5 years. I had all these transfer fees from the utility companies and the payments to the new landlord and I got laid off for a week and took a cut in my child support b/c my ex lost his job and didn’t get a dime from unemployment so I used the hard earned money I saved in my savings account to pay for some bills. If they would look at my checking account they would see I can account for every dime. I am sooo mad that they charged me and it is not like I was transferring money to someone in another country, then I can see the governments reason for this. But b/c the banks don’t know how to handle their money I need to be punished? I needed a bail out and I saved and damn it I should be entitled to use that money whenever and as much as I want. I’m not talking a lot of money here either. I was only transferring small amounts to cover some bills, just happen to make more than the allotted transfer amount in my billing cycle.
I agree. This happened to me a few months ago, however I was told by US BANK that any atm withdrawls or transfers was not included in the 6 transactions. So, this month I had 8 and was charged $30. The bank will not credit this money back to my acct either. This is crazy… we put our money in the banks & all they do is take it.
I just had this happen to me. US Bank $15 a pop. What I think is ridiculous is that they don’t charge any fees until the very end. If they were so concerned about my transfers online, they should have a window that pops up that says “nope, you can’t do this. Come into your local branch.” But of course, like everything else banking related, they let it go through and act like they’re doing you a favor and then charge you up the @#$*( for it.