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Explanation of Savings Transfer Limits
I was told by my bank that all ATM and customer withdrawals count as one of the six transaction limitations under Regulation D of the Federal Reserve and that their policy is to charge a fee for anything over four transactions. After being hit hard with fees, I went in to close my savings account and was told it was the Federal Government that made the rules not the bank, that all banks charge a fee for over four transactions and that ATM and customer withdrawals were included. The only transactions that were not counted were deposits. Is this true?
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 The bank either misunderstands the requirements of Regulation D or is stretching the truth a bit. The regulation does, indeed, require that banks limit their customers' transfers from a savings or money market deposit account on a monthly basis. The rule is complex, but if you can complete a transfer from your account from the comfort of your home or office -- using a bank's internet banking service, by telephone or fax, for example -- your transfers count toward the monthly limit of six. Within that limit of six, only three checks or debit card transactions that transfer funds to a third party are permitted. Transactions that you make in person at the bank or at an ATM do not count toward the monthly limit in the regulation.
Banks are permitted to impose their own limitations on savings account transfers, as long as those limitations are at least as strict as those in the regulation. The regulation makes no reference to assessing fees for excessive transfers. Any fees imposed are part of an individual bank's policy, and they are by no means universally imposed, although it's possible that most banks in your area do so. While ATM transactions are not limited by the regulation, your bank may have such a limitation or it may impose a fee for four or more such transactions, but for the bank to point to a regulation as the reason for the fee is simply inappropriate and incorrect.
Published on BankingQuestions.com 8/25/08
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