Why “Reg D” puts a limit on your savings account, and what you can do to get around it.
Savings accounts are perfect for stashing your cash. But you may have run into the issue of only being able to transfer money from one a maximum of six times per month. Why is this? We’ll go over why you’re limited and how you can get around it.
Regulation D
You are limited to six transfers per month from a savings account as a result of Regulation D — commonly known as “Reg D”. Reg D is a Federal Reserve Board rule that helps ensure that financial institutions like RMLEFCU have a proper amount of reserves on hand. A useful side effect, of course, is that savings accounts function as they are intended: to save money, not spend it.
When Are You Limited?
The six-transfer limit (and a potential penalty) falls under certain scenarios and depends on the type of transaction being conducted. The following transactions count toward the six-transfer limit:
- Online transfers between accounts at RMLEFCU or other institutions
- Transfers processed over the phone
- Automatic transfers, such as bill payments
- Overdraft transfers from savings to checking
- Transfers made by check or debit card
Some transfers don’t count toward the limit of six, such as those made at ATMs, made in person at the teller window, or withdrawals made by phone where the check is mailed to you.
How to Get Around Them
The Reg D rules don’t really have to be much of an impediment on your savings account, and there are simple ways to get around them. For instance, a checking account won’t put limits on usage, and can make a lot more sense for making bill payments or keeping cash on hand. You can also make transfers count by doing fewer of them with larger sums of money as opposed to small, frequent ones.
If you do reach your six transactions, keep in mind you can skirt the Reg D limit (and any resultant fees) by heading for the ATM — or a RMLEFCU teller window. Your money is your money, and we’ll help you keep it at hand.
