A new rule permits banks to allow customers more than six withdrawals per month from savings accounts and waive excessive transaction fees. Previously, one of the main distinctions between checking and savings accounts was the inability to withdraw from a saving account more than six times per month without excessive transaction fees. This only relates to taking money out of a savings account, not putting money in savings accounts.
The key to understanding the new rule is that banks now have the choice whether to limit transfers from savings accounts. They were previously mandated to limit transfers. So each bank can now come up with its own rules for savings account transfers. For instance, Ally Bank is allowing unlimited transfers from savings accounts without charging excess transaction fees until July 18, 2020. Each bank may be different so you will need to check with your bank for its new rules.
April 24, 2020
Federal Reserve Board announces interim final rule to delete the six-per-month limit on convenient transfers from the “savings deposit” definition in Regulation D
The Federal Reserve Board on Friday announced an interim final rule to amend Regulation D (Reserve Requirements of Depository Institutions) to delete the six-per-month limit on convenient transfers from the “savings deposit” definition. The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.
The regulatory limit in Regulation D was the basis for distinguishing between reservable “transaction accounts” and non-reservable “savings deposits.” The Board’s recent action reducing all reserve requirement ratios to zero has rendered this regulatory distinction unnecessary.