If you have a savings or money market account at a bank or credit union it has limitations on transactions set by Regulation D which was established by the Federal Reserve Board to implement reserve requirements for depository institutions. Regulation D limits the number of electronic transactions on a savings or money market account to 6 or 3 in a calendar month depending on the type of transaction.
Transactions that are limited:
- Pre-authorized transfer to a third party
- Pre-authorized payment to a third party (ACH)
- Pre-authorized transfer to an individual’s own non-loan account
- Transfer for overdraft protection
- Transfers or payments done via telephone system
- Transfers or payments authorized via fax
- In addition no more than three transactions may be made by check, draft, debit card, or similar order and payable to a third party
Unlimited transactions allowed:
- In person request
- Transactions initiated via mail
- To make a payment on an in-house loan account
- Transactions via ATM
I was aware of this regulation yet today I was very surprised to notice a $12 fee in my savings account this morning when checking my bank accounts online. Sure enough, we had over 6 electronic transactions this month and it was my own fault. Thanks to the holiday season and some unexpected car repairs earlier this month I had transfered some money to our checking account from savings a few times. Well, these transfers in combination with our already existing pre-authorized transfers to some other accounts triggered the fee.
I did go to the bank over lunch to see if there was any way to have the fee reversed. I was not very optimistic since it was not a bank error by any means, but after speaking to the manager and noticing it was the first time this has happened they removed the fee. It was clearly a mistake on my part but the manager said very few people are told about this or aware of it so they had no problem reversing it for this first time.
So this serves as a reminder that if you plan on doing online or telephone transactions, make sure to pay attention to the frequency of transactions, especially if you have existing pre-authorized transactions in place. I will be changing a few of our automatic transfers to use checking in the future in order to reduce the possibility of this happening again. I will also be sure that when I do go online to move money between accounts I will use larger amounts less frequently or simply go into my local branch.
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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.