Did you know that you know that you are limited to just six transfers out of a savings account per billing cycle? Find out Why Do I Have a Limit of 6 ACH Transfers Per Month With My Savings Accounts?
Banks will fine you for exceeding your limit. Some of these fines are pretty hefty and will take value out of your savings account as well.
We recommend you learning more about the CIT Bank Savings Builder account and the Discover Bank Online Savings account.
Why Does the 6 Transfer Limit Exist?
Your savings account is considered a “Savings Deposit” and is subject to different rules than a checking account.
This has to do with reserve requirements, or how much a bank is required to keep around in their vaults in different accounts.
The Federal Reserve Board defines a “Savings Deposit” limit as:
| The depositor is permitted or authorized to make no more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle . . . to another account (including a transaction account) of the depositor at the same institution or to a third party by means of a preauthorized or automatic transfer, or telephonic (including data transmission) agreement, order, or instruction, and no more than three of the six such transfers may be made by check, draft, debit card, or similar order made by the depositor and payable to third parties. |
This limit only applies to transfers out of savings accounts and not checking accounts. You should be familiar with these accounts when applying for a bank rate.
What Counts As a Transfer Out of My Savings Account
Anything that may be counted as “convenient” will count towards this limit. Here are some things that are under this category:
- Preauthorized, automatic transfers (including overdraft protection and bill payments)
- Initiated by phone, fax or computer
- Made by check, debit card, or other similar order made by you to a third party.
How To Get Around The Limit
An easy way to get around the limit is make larger withdrawals at a time. By having access to more money at a time, you will less likely have to withdrawal more frequently.
Another way around it is to make “unlimited withdrawals by mail, messenger, ATM, in person, or by telephone (via check mailed to the depositor).” These types of transactions don’t count as convenient, so they don’t count towards the limit.
If you really need to make a transfer between accounts, you can always withdraw it from an ATM from your savings account and deposit it into checking. Additionally, you could speak with a bank teller to make the transfer.
Why Are There Transfer Fees for Savings Account?
Banks don’t want to have to reclassify your account because of excessive transactions. By placing a fee, they can limit your activity.
Additionally, they may not have all your money in your account at any one time and withdrawals will eat into their reserves. Their biggest fear is that a line of people come in at any time and take all their money out of their accounts.
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Conclusion
Now you have a better understanding of why there is a 6 transfer limit on your Savings Account. You should definitely avoid going over the limit by making larger withdrawals. Fines can eat into your account more than frequent withdrawals do.
Finally, find out how to earn a bonus by applying for a bank promotion. Some banks like Chase will even pay you a $150 bonus for opening a Chase Savings Account.
