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Most savings accounts still come with limits on withdrawals even after Regulation D lifted them

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Two years ago, the Federal Reserve removed withdrawal limitations that banks had to enforce on savings accounts.

But since then few banks have changed their policies in response. Many savings accounts and money market accounts still have some restrictions on the number of withdrawals or transfers that can be made.

Until April 24, 2020, Regulation D limited account holders to a maximum of six convenient withdrawals and transfers from a savings deposit account per statement cycle. (Savings and money market accounts are considered savings deposit accounts.)

Before the restrictions were lifted, unlimited withdrawals from an ATM or a bank teller were permitted from savings deposit accounts. But convenient withdrawals, such as via check or transferring money electronically from a savings deposit account to another account, were limited.

List of top banks that eased their limits

Bankrate reviewed 69 bank websites to find what withdrawal and transfer limitations were placed on savings or money market accounts. Bankrate found that 46 had limits while 23 didn’t.

Some banks either permit more than six withdrawals or transfers each statement cycle or don’t track the number of times withdrawals or transfers are made from savings deposit accounts. Among them:

  • Ally Bank: Imposes a limit of six withdrawals per statement cycle, according to its website. But the online-only bank is temporarily refunding the $10 fee it charges for excess withdrawals and isn’t imposing transaction limits, due to the Reg. D changes.
  • American Express National Bank: Allows up to nine withdrawals or transfers each monthly statement cycle.
  • Bank of the West: Allows no more than nine transfers a month on money market and savings accounts.
  • KeyBank: The Key Active Saver account limits the number of withdrawals or transfers to seven a month, after which a $5 fee applies.
  • Union Bank: Offers unlimited transfers and withdrawals.
  • U.S. Bank: The Minneapolis-based bank has no transaction limits and charges no fees for savings withdrawals.

Among the findings, Bankrate’s review of top banks and credit unions showed that Huntington Bank charges $2-$15 for excess transactions, while BMO Harris, KeyBank, Truist and Zions Bank all charge a $15 fee on at least one of their savings deposit accounts.

3 reasons many banks still limit savings withdrawals and transfers

1. It’s optional for banks – they’re not required to change their limits

Banks were able to suspend the six-transfer limit, but they weren’t required to, which is likely the main reason some banks haven’t changed their limits on transfers or withdrawals.

2. Most banks don’t need additional deposits

“Banks are awash with deposits and they don’t know what to do with them,” says Chris Cole, executive vice president and senior regulatory counsel for the Independent Community Bankers of America (ICBA). “So that’s why they’re not changing the terms to make the products more attractive.”

In the future, banks that haven’t already done so might add withdrawal flexibility to try to win customers.

3. It’s not a final rule

The removal of limits on withdrawals and transfers from savings deposits was an interim final rule.

“[Banks are] still waiting for that final piece — meaning that they’re still waiting for a final rule to be issued by the Fed before they actually implement [changes],” says Heather MacKinnon, vice president of legal at the Wisconsin Bankers Association.

Restrictions might be good for encouraging saving

Some savers may benefit from having withdrawal and transfer limits on savings deposit accounts. Only about 4 in 10 Americans were able to pay a $1,000 emergency bill from savings, according to a Bankrate survey published in January.

Knowing that withdrawals are limited may prevent some savers from withdrawing or transferring funds too frequently, helping to keep their savings intact for times when they truly need it.

Written by
Matthew Goldberg
Consumer banking reporter
Matthew Goldberg is a consumer banking reporter at Bankrate. Matthew has been in financial services for more than a decade, in banking and insurance.
Edited by
Wealth editor