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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!

{ 314 comments, please add your thoughts now! }

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314 Responses to “Limit of 6 ACH Transfers on Savings Accounts”

  1. maryam says:

    Has nothing to do with banking institution. It is our beloved FEDERAL RESERVE (MR. BERNANKE perhaps need to address this) that puts the limit on Savings/deposits/money market accounts. This is part of the PATRIOT ACT, installed by our former dearly beloved Prez. Mr. GW Bush.

    • Wonderful says:

      Regulation D has NOTHING to do with the Patriot Act. I think you are confused. The Act allows the gov’t to keep a closer eye on foreign banks and accounts. See here:

      “The act, as a response to the terrorist attacks of September 11th, significantly reduced restrictions in law enforcement agencies’ gathering of intelligence within the United States; expanded the Secretary of the Treasury’s authority to regulate financial transactions, particularly those involving foreign individuals and entities; and broadened the discretion of law enforcement and immigration authorities in detaining and deporting immigrants suspected of terrorism-related acts. The act also expanded the definition of terrorism to include domestic terrorism, thus enlarging the number of activities to which the USA PATRIOT Act’s expanded law enforcement powers can be applied.”

      -Source Wikipedia

  2. JJ says:

    Your headline is a little miss leading because Bank Of America will charge you the fee if you have more than 3 transfers and your savings daily balance is less than $2,500. Just to give any BofA customers a heads up

    • Ellen says:

      In regard to BofA, I just got off the phone with them. My son was charged $93 in fees because he transfer more than 3 times. The guy on the phone could not explain why, he just kept telling me it is a federal regulation.

    • ca says:

      also chase charges 5$ for going over that 6 transfer in 1 cycle rule so chase members take a look.. they paid me back all my fees for it 50$ worth :) i think this law or rule is such BS its my money if i need it dont charge me for it i worked for it not them!

  3. Gwyn says:

    If anyone can help me I’m a single Mom no job. I want to know why my bank is charging me fees on saving.I have been with the same bank since 1999 and was never charged me before? They are telling me federal regulations this is BULLSH-T!!

    • Matt says:

      I would say your first step is to find a different bank! Shop around locally and tell them what you’re facing with your current bank. I guarantee a bank with better terms will be glad to convert you over.

  4. Daniel says:

    Found your website on google. Left immediately because of pop up. Just thought I would drop a note to let you know.

    • Ralph says:

      Feel the same way I hate pop ups and go away as fast as they come up but wanted to let you know it’s not as cool as you think….

      R

  5. Marie Murson says:

    This is infuriating. My bank is not giving me 6 withdrawals, they are only allowing me 4 and charging me a whopping $25.00 if I go over that. I am so very sick of fees and the government taking the bank’s side once again. I am pulling my money out. I need it more than them…..enought said!

    • Tom in Austin says:

      Two words my good man: credit union!

      Boycott the Evil Four (monolithic cyborg banks that own the US financial market!

      • Beth in Milford says:

        I just learned yesterday about my Credit Union doing the same thing as your mainstream banks. They only allow 6 such transactions between 2 different account numbers both with my name on them or they charge a $4.00/month fee. Why doesn’t our government need anymore of my hard earned retirement!!??

        • Jim says:

          It’s not a choice on the part of banks, it’s federal law that has existed for a long time.

          • Amy says:

            This shouldn’t EVER be a federal law. It doesn’t matter what you decided to do with your money they should never charge you a fee for transferring between a checking and savings account. For example, I went to look at beds, went into the store about an 1 1/2 before closing, decided I wanted to buy the bed I found but did not have the sufficient funds in my checking so I went onto my phone to my bank app and transferred the money needed to pay for the bed. Stimulating the economy by purchasing things, because I didnt have to come back to the store when I had the money I don’t see why everyone so money hungary with my earned money.

      • Melissa says:

        It’s not a bank thing or a credit union thing it’s a federal thing. Credit unions are typically only good for lower interest rates on loans and in some cases banks can match or beat those as well.

  6. don says:

    Credit unions do this as well , i have 5,000 in saving and now i have 6 transactions going thru and they are charging 6 dollars each.

    For 5 transactions , i read online that VISA has a prepaid visa card and people are just having their paychecks deposited on those – 0 fees and its backed up by visa.

    So just use the credit union for checking , for emergencys – and get away from the BS permantly !

    :)

  7. endless mtns says:

    My question is this…Who or where does the $4 for each transction go ?

  8. Cora Shackelford says:

    It not all about the banks but all about our government. We have too much government dictating what our companies can or can not do including the banking institutions. So if you want someone to blame don’t blame the banks, blame your government.

  9. Upset says:

    I just got off the phone with my bank and I was told that I have 6 but I can only use 5 or my account would be closed. WHAT A CROCK!

    • Melissa says:

      You might want to clarify I work for a bank and we notify our costumers when they get to five to help them stay under. The government will change it to a checking account if you are using it as such and need the funds available to flip back and forth. My suggestion is open up a secondary checking attached to your primary to use for that purpose and use your savings account to save.

  10. Keith says:

    Maryam, where do you get that this is part of the Patriot Act, for Pete’s sake? That’s just ridiculous. The regulation was certainly in effect since at least 1990, though the number of withdrawals and the terms regarding what types of transactions are included and excluded from the regulation has varied over the years. I agree that the regulation seems unfair to us – it’s our money! – but don’t confuse the issue further by making silly assertions that are simply untrue.

  11. Libby says:

    I got a warning letter on my honeymoon that I couldn’t go over 6 online transfers.. I’m with a credit union now so I don’t get charged any fees. I did not receive the warning while on my honeymoon, so by the time I got back home my account was shut down online so I can only view my accounts, but I can’t do any online transactions. The tellers at the bank said that once it’s shut down they won’t allow me to use online banking transaction features anymore… is there a way to petition this? I have to go into the bank branch every time I need to make a transfer.. it’s not the end of the world but it’s so much easier to do it online.

  12. BJ says:

    I understand this is so that the bank will be assured of having the money to “loan” to people, by curtailing how much money can be moved from savings. In this respect, it makes sense. I know I sure like to be able to borrow when I need it.

  13. ProjectGuy1930 says:

    Seriously? The Feds can tell us how often we can transfer? Sounds like a “Federal Regulation” that was requested by the banks and approved by the Feds as part of the high level wheeling and dealing that goes on between the Feds and the banks. I would suggest that this apply only to folks who request loans from their banks. As people who don’t purchase when we can’t afford it and don’t take out loans (only mortgage and car), it’s shameful that we must pay for the lifestyle of those who do. Of course, I could leave all my money in the checking account, but then I’d lose all the interest the bank is paying me so that I… oh, yeah – scratch that.

  14. Anonymous says:

    The real Question is, is it Federal Law for the Banks to Charge you a Fee for going over the Six Transactions or are the Banks just using the Law to make Money.
    I thought this Law was to make sure the Banks had Funds for Lending and to inform the Government of Excess Activity. What sense does it make to punish you for taking Money out of your Account by taking more Money out of your Account except for the reason of putting Money in there Pockets.

  15. Tonya says:

    I think this is the most ridiculous thing I have ever heard of. No one thinks to tell a person opening an account. So surprise, you get zinged. I honestly feel it is just the stupid government zapping it to the little person AGAIN!! It is MY money, I should be able to do whatever the heck I want with it. Needless to say I am very, very upset. And of course, because it is FEDERAL (meaning the stupid people in the white house and other governmental offices) my bank can’t give it back to me. STUPID STUPID

  16. Learn2Bank says:

    I cannot believe the comments that I am seeing here. If you want to transact freely then open a checking account. A savings account is not a checking account. They are two different financial instruments. If you want higher interest rates then look into a money market checking account. Tough cookies everyone, we are in a low interest rate environment and it is what it is.

    Those that complain about Regulation D must have missed the near financial collapse of 2008! Do you want your bank to take undue risks with your deposits?

    One final thought. Opening an account and failing to read the disclosures does not make you right. If you choose to throw away the booklet without reading it and learning about the limitations of your account, then you should blame yourself for any mishaps that may occur.

    • Peg says:

      Let me get this straight. You want us to pay to transfer funds from savings (my money) to our checking (my money) to purchase (helping the economy to keep rolling) paying for said purchase? The banks need to restrain themselves when it comes to borrowing money they do not have. It isn’t my job to patrol them by cutting off my funds, therefore limiting the amount I choose to spend! Give me a brake… Maybe the Gov should be auditing and patrolling them instead of being in bed together . Something is very wrong with our society and it’s called GREED!

    • Tom Detweiler says:

      This person works for a bank. Nothing like self interest to bring out the quoting of regulations. Regulations they and their greedy clique of only nominally necessary bureaucrats instituted for themselves via lobbying.

    • Amy says:

      Totally agree with Peg its all MY MONEY they shouldnt charge anything for a savings or a checking they make enough money with there credit cards interest rates oh and my whole 0.01 interst gain on my savings give me a break

  17. Pat Shaver says:

    That is a bunch of crap. It is my money.

  18. Tom Detweiler says:

    This is an absolutely onerous and ominous indicator of our burgeoning Obamanazi police state. I find it reprehensible and morally evil. It probably only exists because greedy bankers lobbied this worst most corrupt congress of all time, for special privileges so they could bilk their own customers out of their own money with the “federally mandated” excuse pasted on their filty activities.
    Disgusting.

  19. Ann says:

    I was just slammed with 80$ in fees by BECU. I frantically did some research to figure out what it meant, only to discover it was some fed regulation I’ve never heard of, although banks aren’t required to charge fees?? Wow. Never have I felt so naive. Why isn’t this more advertised? It just seems like a way for banks to get money out of you, the reg d doesn’t even require banks to issue fees! And BECU never said a thing about it when I opened my account and I received no warning or notice that I’d reached a max transaction limit. I feel so ignorant and appalled that I was somehow clueless that this kind of thing exists. This has been a costly life lesson…

  20. JG says:

    Experienced the same issue. Not a huge fee just irritated. And the letter treats you like a common criminal with it’s legal wording. WE get it. You think we are doing something illegal. It was less than $1000 in transfers to pay bills that I didn’t plan on. Wouldn’t want to be late on a bill. I will be changing to just using my checking acct. And that big interest rate!! Oh boy. That makes me want to keep my money there. Maybe I will keep my money in my mattress. I already have to have a minimum that the bank gets to live on. I think it’s ridiculous. For those of us who just like to move money from our savings to our checking. So ridiculous. And this age of everything being ACH and easily transferred. We are encouraged to do this! They really don’t advertise the federal mandate. That’s a real problem. The bank is definitely not on our side. It’s clearly not a bank rule but a federal regulation but it doesn’t make it any easier to trust either institution. I guess it’s back to going to the bank more. I don’t do ATM cards. Really seems like a useless rule that was enforced for people who were doing something illegal. Nothing good ever comes from federal anything!!!! Thanks for the thorough explanation. More than I got in my “first notice” of violation. LOL

  21. Stacey says:

    I think that my savings is my money and no one should be able to mandate how many time I can or cannot withdraw money from it this is the stupidest rule !!!

  22. laurasplace says:

    The government wants to regulate our hard earned money yet can’t even get a grip on their own finances. I don’t think they are going to control mine. They get enough of my money without telling me what I can and can’t have or do with it.. that just chapps my ass! I will start my own saving the oldfashioned way. Govermemt my ass…..they have no clue what their doing…..in any political parties for that matter! …..Canada bound Fed up American in search of a better governed country.

  23. jay says:

    found out about this today doing a transfer from my business savings to my business checking to pay for an invoice coming in.
    This is not an online account. This account is at a brick and mortar credit union.
    I think it’s bullshit. I should be able to move my money around as often as needed between my accounts to transact my personal and business needs

  24. Wonderful says:

    @Tom Detweiler – It has nothing to do with the Obama Administration. You obviously know nothing about the banking system and how it works (I suggest you take an Economics course). Here’s a little education for you (see below). And the regulation, called Regulation D precedes the current administration (And Tom, you would know that if you bothered to look at the date of this article. It’s from 2006 and Bush was in office).

    “What is Regulation D – Reserve Requirements?
    It is a requirement that all depository institutions maintain a percentage of transaction account balances on deposit in non-interest earning reserves with the Federal Reserve Bank. Savings, Money Maker and Premier Money Maker are not transaction accounts and are not subject to the same reserve requirements, however, the type and frequency of withdrawal and transfer activity is restricted. Savings, Money Maker and Premier Money Maker Accounts permit no more than six (6) pre-authorized, automatic or other transfers per month, which includes pre-authorized, automatic or telephonic transfers, including CheckOK , Internet transfers, to a third party or to another account with us (excluding ESL Loan payments) or Money Maker checks. ATM transactions are not included.

    What accounts does it affect and how?
    Savings Accounts: No more than six (6) withdrawal transactions may be made in one month per savings account, done through Internet Banking, TEL-E$L, ACH or by a Tele-Banker.

    Money Maker and Premier Money Maker Accounts: No more than six (6) withdrawal transactions may be made in one month, which includes pre-authorized, automatic or telephonic transfers, including CheckOK , Internet transfers, to a third party or to another account with us (excluding ESL Loan payments) or Money Maker checks. ATM transactions are not included.”

    - Source: ESL Federal CU

  25. Melissa says:

    I think this whole thing is funny. Why do you open up a checking account? Typically to pay bills out of and spend. Why do you open a savings? To save! What do you have in place if you go negative? Maybe a reserve line, premier line or something? What happens when you need to buy a house do you pull it out of your savings or go to the bank and ask them to loan you the money? It’s the great circle of spending and lending. If you don’t want to get dinged from the government from going over the limit then do your transfers once a week, that would average only 4 a month and if an emergency happens that you have to do it twice in one week then thats fine. Otherwise open a secindary checking that can be attached to your primary account. You can use it for many different things, online shopping, security account, travel account, christmas account, bills, etc,


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