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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
-
Ask the Editor: Itemized DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on itemized deductions claimed on Schedule A of Form 1040
-
9 Types of Insurance You Don't NeedFinancial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
Are You Putting Yourself Last? The Cost Could Be Your RetirementIf you're part of the sandwich generation, it's critical that you don't let the needs of your aging parents come at the expense of your future.
-
9 Types of Insurance You Probably Don't Need
Financial Planning If you're paying for these types of insurance, you may be wasting your money. Here's what you need to know.
-
The November CPI Report Is Out. Here's What It Means for Rising PricesThe November CPI report came in lighter than expected, but the delayed data give an incomplete picture of inflation, say economists.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
What Will the Fed Do at Its Next Meeting?The Federal Reserve is set to resume its rate-cutting cycle at the next Fed meeting.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
May Fed Meeting: Updates and CommentaryThe May Fed meeting came and went with little fanfare as Fed Chair Powell & Co. stuck to their data-dependent script toward interest rates amid tariff uncertainty. The May Fed meeting came and went with little fanfare as Fed Chair Powell & Co. stuck to their data-dependent script toward interest rates amid tariff uncertainty.
-
CPI Report Puts the Kibosh on Rate Cuts: What the Experts Are Saying About InflationCPI Consumer price inflation reared its ugly head to start the year, dashing hopes for the Fed to lower borrowing costs anytime soon.
