Transfer Limits on Savings Accounts: Or, why I love my credit union

Gather Little by Little reports that he ran up against the six-withdrawal limit with an ING Direct savings account he was using as his “firewall.” The bank informed him that the next time he made more than six transfers out of that account in a month, the account would be closed.

Take that, you PF desperado!

Well, I must say, I was surprised, too. I thought this applied only to money market accounts. Withdrawals from money market savings and checking accounts are strictly limited. Turns out the Federal Reserve’s Regulation D applies to regular savings accounts, too. I cruised over to my credit union’s site to see what they had to say on this issue, and lo!

What constitutes a Regulation D transaction? Transfers or withdrawals by Online Banking or Telephone Banking, preauthorized withdrawals or transfers, and transfers to cover overdrafts. Unlimited withdrawals or transfers may be performed in person or at an ATM, institution fees may apply.

Interestingly, you can withdraw your little heart out if you physically go in to the bank, or, bizarrely enough, if you transfer or withdraw money through an ATM. ???? What the heck is the difference between an electronic transaction on an ATM and an electronic transaction done on your PC (except for the greater opportunity presented by ATMs to gouge customers)?

Oh, well. What it tells you is that there’s at least one advantage to using a brick-and-mortar institution: you can’t go in person to an online bank, but you can visit a credit union or bank that’s within driving distance.

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Revanche May 10, 2009 at 6:38 pm

I ran into this problem last year when I unwittingly angered the 6-transfer-limit gods. I skirted the problem by getting creative with how and when I transfer money out, but I certainly did think that it was going to cramp my new money management system at the time.

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