Regulation Rules for Savings Accounts

Withdrawal Limits

Regulation D stipulates that account holders can make no more more than six withdrawals during a calendar month or statement cycle. Statement cycles last for approximately 30 days, but the first cycle begins on the day that a customer opens an account so therefore few statement cycles coincide exactly with calendar months. People who make excessive withdrawals must pay penalty fees to the financial institution holding the account. The fees vary from bank to bank. Financial institutions can convert savings accounts into non-interest-bearing checking accounts if customers repeatedly exceed the withdrawal limit.

The Act does not restrict all types of withdrawals, but covered transactions include pre-authorized transfers to other accounts owned by the same account holder at the same bank. Transfers initiated by fax, telephone or Internet banking to the same customer's accounts at the same bank or any other bank are also covered. Withdrawals made with checks, debit cards and bank drafts are limited by the Act although in many cases banks do not permit customers to write checks or make debit card transactions directly from regular savings accounts.

Transactions that do not count toward the monthly transaction limit include withdrawals made at automated teller machines. ATM transfers between accounts do not count and neither do in-person transfers made at the bank. Customers can also transfer funds via the mail with the use of deposit and withdrawal slips without it counting toward the maximum. Finally, automatic transfers set up to pay loans and mailed loan payments are non-covered transactions under Regulation D. There are no limits on non-covered transactions.

In 1982, Congress passed the Garn-St. Germain Act, which authorized the creation of bank money market accounts. These accounts are classified as savings accounts, and account holders must comply with Regulation D requirements. Money market account holders do have check-writing privileges and often are able to directly access funds through debit cards when making non-ATM-based withdrawals. Prior to 2009, check withdrawals were limited to three per month, but the Federal Reserve amended the Act and now checks are treated no differently than other covered transactions