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Limited Transfers Explained
This is a follow-up question to my previous question. I now understand the theory behind the law, but it doesn't fully answer my question. I still don't understand why I can make a transfer dozens of times per day in person or via ATM, but only six in a month via the internet or via phone. What's the difference between the two categories?
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 Essentially, the difference is one of convenience and of compromise. As noted in the earlier answer, there was a lot of lobbying going on when Congress authorized money market deposit accounts. Banks lobbied to permit unlimited ATM transfers and withdrawals, arguing that an ATM visit is like a personal visit to the bank. On the other side of the argument were those that said if a customer could make transfers as readily as picking up a telephone, there would be no real limit on spending the funds in the money market account. The latter argument grew to include other easy-access methods that used telephone lines (like internet transfers).
Of course, ATM transactions are also transmitted via telephone lines in many cases, but Congress and the Federal Reserve Board (who wrote the regulations for the law) were willing to ignore that fact. The easiest way to understand the basic rule (yes, there are exceptions) is to say that if you can complete the transfer (or bill payment) from the comfort of your home or office, the limits will apply. If you have to leave your home or office (to go to the bank or to an ATM, for example), the limits don't apply. It's also interesting to note that it doesn't matter who owns the ATM you visit.
Published on BankingQuestions.com 6/12/07
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