Regulation D (Reg D) is how the Federal Government ensures banks have the proper amount of reserves on hand. Reg D encourages people to use savings accounts as they are intended: to save money. Reg D limits the number of withdrawals or transfers to six per calendar month for a savings account or per monthly statement period for Money Market accounts (MMA).
Transactions Limited Under Reg D
Below are the types of transactions that are limited under Reg D:
- Online transfers from one account to a different account either at the same institution or a different institution
- Transfers processed over the phone
- Automatic or preauthorized transfers, such as bill payments or any other recurring transfers
- Overdraft transfers from a client's savings account to their checking account such as a sweep
- Transfers made by check or debit card
Transactions That Do Not Apply to Savings Account Withdrawal or Six-Transaction Limit
The following do not apply to savings account withdrawal or six-transaction limits:
- Withdrawals made at an Automated Teller Machine (ATM)
- Transactions made in person at an office location
- Withdrawals made by mail
Going Over the Maximum Withdrawal Limit
Reg D limits the number of withdrawals or transfers to six per calendar month for a savings account or per monthly statement period for Money Market accounts (MMA). Excess withdrawals or transfers will result in a $10 fee per debit over the calendar month or statement period.
Request For Cash After Reaching Six-Transaction Limit
Use one of the following methods (not limited by Reg D) for clients needing to access cash from their savings account after reaching the six-transaction limit:- Withdraw from ATM
- Withdraw in person at an office location
Client Notification for Maximum Withdrawal Limits
Clients receive a notice once the transaction limit has been met. When a client indicates they have received a notice indicating they have exceeded their limit, do the following:
- Educate the client on why they have received the notice and go over the withdrawal limits policy.
- Some clients do not read the disclosures they are handed at account opening. By educating the client, you as the associate have done your due diligence in letting them know how to avoid withdrawal limits. Explain how excess withdrawals (that are limited under Reg D) will result in a fee.
- Talk to the client about making one large transfer versus multiple small ones. They can always transfer any unused funds back to their savings account if needed.
- If the client asks for their fee back, as always, look over their account and make a judgment call. Associates must make sure that you are thoroughly explaining to the client why this happened and how to avoid it moving forward.
Client notices for maximum withdrawal limits can be found in Synergy (DD5456 - Savings Excessive Withdrawals, DD5451 - Money Market Excessive Withdrawals).