Is there a Federal limit to the number of withdrawals from a savings account?
I discovered a service charge from Chase Bank, which was explained to us as a Federal regulation rather than a regulation imposed by Chase. Is this true? Where can I verify this? I obviously cannot ask the bank because I am not sure they are telling me the truth!
Regulation D: Savings Account Transaction Limitations
Federal regulations require banks to limit the way withdrawals may be made from a savings or money market deposit account. Withdrawals in excess of these limits may result in a fee or account closure.
Customers sometimes wonder why bank accounts have different terms or pay different interest rates. One of the reasons is Regulation D:
Regulation D applies to all financial institutions.
It imposes uniform reserve requirements on transaction accounts or non-personal time deposits, defines such deposits, and requires reports to the Federal Reserve.
The regulation establishes operating parameters for each account category, such as transaction accounts (demand deposit or checking accounts) and non-transaction savings accounts. For instance, this regulation currently prohibits the payment of interest on business checking accounts.
Regulation D also places limits on the type and number of withdrawals that can be made from certain non-transaction accounts, such as savings and money market deposit accounts.
Checking accounts are deemed to be “transaction accounts”, and have no such transfer or withdrawal limitations.
What accounts does it affect and how?
Savings Accounts and Money Market Deposit Accounts: During any month, you may not make more than six withdrawals or transfers to another bank account of yours or to a third party by means of a pre-authorized or automatic transfer or telephonic order or instruction. No more than three of the six transfers may be made by check, draft, debit card, if applicable, or similar order to a third party.
To help you understand these Reg. D savings account transaction limitations, and to avoid excess activity charges, please review the following information:
Non-Limited Transactions:
Deposits
ATM cash withdrawals and transfers (subject to the daily amount limits and sufficient available funds)
Withdrawals made in person, by mail, or by messenger at a bank office
Transfers made in person at a bank office
Automatic transfers to repay your bank loan
Limited Transactions:
Checks, point-of-sale (POS) transactions, or debit card purchases (a maximum of three during each monthly statement period)
Automatic transfers to another deposit account at your bank
Automatic transfers to a third party or another institution
Telephone transfers, including Touch-Tone-Teller and those initiated by phone call, fax or e-mail through a Bank representative
HomeAccess online banking transfers and Bill Payments
In order to ensure that no more than the permitted number of withdrawals or transfers are made, the regulation requires that depository institutions take steps to prevent excessive transactions.
Excessive Transactions: Withdrawals or transfers by mail, in person at one of our offices, and through an ATM are unlimited and are not subject to the Regulation D 6-transfer withdrawal limitation. Transfers/withdrawals in excess of the 6-transfer/withdrawal limitations as described above may be subject to a service charge.
For customers who continue to violate those limits after they have been contacted by the depository institution, the Regulation requires that either the account be closed or that the funds be transferred to a transaction account that the depositor is eligible to maintain.
FDIC Insured – Your deposits are federally insured to at least $100,000 per depositor by the Federal Deposit Insurance Corporation (FDIC), and your retirement funds on deposit at Pacific Trust Bank are separately insured by the FDIC up to an additional $250,000.
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