The penalties for making more than six transactions will differ from bank to bank. Some may charge you a per-transaction fee, and others might close your account or turn it into a checking account. And your savings account may not even offer some of these features, such as a debit card or check-writing capability. Either way, it makes sense to try to stay within the Regulation D limit.
Regulation D does not restrict the number of "inconvenient" transactions you can make, although you should also check to see if your bank has specific rules for your account. Inconvenient transactions include:. There are several ways you can avoid penalties for going over the Regulation D transaction limit. The simplest is to always use your checking account for your everyday banking. If necessary, make one larger transfer between your savings and checking account to cover your costs.
Plan out how much money you might need each month, and organize your transfers accordingly. If you've set up overdraft protection by linking your savings account to your checking account, be careful -- these automated transfers count as convenient transactions. If you're pushing your transaction limit, visit the bank or ATM and make your withdrawal or transfer directly.
Regulation D notwithstanding, it's good practice to avoid making lots of withdrawals from your savings account -- after all, the whole point is to use it for the money you want to save. The novel coronavirus has changed many aspects of our lives, and the Regulation D rule is no different.
On April 24, the Federal Reserve announced that it would temporarily suspend the six-transaction rule, effective immediately. Banks are now allowed, but not required, to lift transaction restrictions for savings accounts and MMAs. It's up to each bank or credit union to set its own rules. Check with yours before you make any additional withdrawals.
This is in part because people may need easier access to their savings right now. Plus, in these stay-at-home times, the Fed does not want to encourage people to go to banks or ATMs -- inconvenient transactions may actually be dangerous, not just a hassle. The other reason is that the Fed has reduced the reserve ratio the amount banks need to keep in their coffers to zero. As discussed above, previously, banks needed to keep a percentage of their deposits in reserve, and Regulation D helped them to help them do so.
If you're worried that this means your money is less safe in the bank, don't panic. The bank reserves and Regulation D are only two of many protections. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy.
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The information on this site does not modify any insurance policy terms in any way. You can thank a regulation that treats your savings account and money market account differently than your checking account. Savings accounts and money market accounts are non-transaction accounts, while checking accounts are transaction accounts under Federal Reserve Board Regulation D.
Try to leave your savings in savings. Take care not to overdraw your checking account, and set up alerts to notify you ahead of time when your checking account balance is getting low. Try not to use your savings account as a regular source of cash or as a method of paying monthly bills. Ideally, you should leave your savings alone as much as possible and let compounding interest work its magic to grow your savings over time.
Ben Gran is a freelance writer who covers personal finance and financial services. A graduate of Rice University, he has written for several Fortune financial services companies. Ben is based in Des Moines, Iowa. She has worked as a personal finance editor, writer, and content strategist covering banking, credit cards, insurance and investing. As a small business owner and former financial advisor, Daphne has first-hand experience with the challenges individuals face in making smart financial choices.
Select Region. United States. United Kingdom. Ben Gran, Daphne Foreman. Contributor, Editor. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. What Is Regulation D? These are the types of convenient transfers and withdrawals that have a limit of six per month under Regulation D: Automated Clearing House ACH and Electronic Funds Transfers EFTs Checks written to a third party Debit card transactions Overdraft transfers in case your savings account is automatically connected to your checking account as a backup for checking account overdrafts Transfers made by computer, fax, mobile device or phone Wire transfers You can generally avoid having withdrawals count toward the six-transaction limit by using an ATM, in-person withdrawal at the bank or by calling and asking the bank to mail you a check.
Your Best Bet? Was this article helpful? Share your feedback. Send feedback to the editorial team. Rate this Article. Thank You for your feedback! But because of the economic impact of the coronavirus pandemic in , the Fed relaxed this rule to make it easier for customers to access their money. These types of withdrawal transactions for savings and money market accounts fall under the rule:. Online transfers, from either within the same institution or to a different one.
Overdraft transfers to checking. Find out how to avoid overdraft fees. Transactions made by check or debit card. Some money market accounts have limited check-writing and debit features. Automatic or preauthorized transfers, such as bill payments or recurring withdrawals.
The following aren't considered convenient transactions under Regulation D:. Withdrawals or transfers made at ATMs. Transactions made in person at a bank. Withdrawals made by telephone if a check is mailed to the depositor instead of electronically transferred to another account. Check with your bank. Even though Reg D exempts these types of transactions from the six-withdrawal limit, some institutions charge penalties for any excessive transactions, including those made in person and at ATMs.
The consequences depend on your financial institution. Some banks are temporarily refunding these fees to help customers during the pandemic. But you will still want to be careful about the number of transfers you make.
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