Fed Revokes Rule Limiting Savings Transfers
But banks are not required to lift the limits or stop charging fees for excessive transactions.
In the past, banks and credit unions were required by the Federal Reserve to limit withdrawals and transfers out of savings accounts and money market deposit accounts to six per month. Partly in response to the coronavirus crisis, the Federal Reserve recently revoked the rule. The Fed says that it does not plan to reimpose transaction limits.
Banks are not required to lift the transaction limits or stop charging fees for excessive transactions, which may run from about $3 to $15. In fact, “the vast majority of banks and credit unions haven’t changed their rules,” says Ken Tumin, of DepositAccounts.com.
Marcus by Goldman Sachs is removing transaction limits on its savings account, which recently yielded 0.6%. Ally Bank is refunding excessive-transaction fees on its savings account (0.8% yield) and money market account (0.5% yield) for now but is waiting for clarification on the Fed’s rule change to determine the bank’s long-term approach. Synchrony is raising the monthly withdrawal limit on its savings account (0.75%) and money market account (0.5%) to 15 per month.
If your bank is enforcing transaction limits, keep in mind that the Fed’s previous rule applied to check writing, debit card purchases, automatic bill payments and other outgoing transfers, such as overdraft transfers, but withdrawals and transfers at an ATM or with a bank teller did not fall under the rule. If you request by phone that the bank mail you a check from your savings account, that’s exempt from the Fed’s former rule, too. But some banks still levy fees for such transactions.
Another idea is to open two savings accounts, allowing an extra six withdrawals per month, says Tumin. You could, for example, link your checking account to one of the savings accounts in case you overdraw checking and use the second savings account for other withdrawals.
If you are charged an excessive-transaction fee, your bank may be willing to refund it, especially if you have never incurred the fee before.