Did you know that the Federal Reserve limits certain transactions on your savings account(s)? Well, they do. And guess what? This morning, I received the following e-mail from ING Direct:
Based on recent activity in your Orange Savings Account, we want to remind you that you cannot make more than six withdrawals from your account each month. This is a federal regulation that all banks are required to follow for savings accounts like this one, so if this type of activity occurs more than three times in any 12-month period, we will have to close your account.
We don’t want that to happen, so here’s what you can do to prevent your account from being closed:
- Take a look at your statements or go to ingdirect.com and review your account activity.
- Keep track of how many times you transfer money out of your Orange Savings Account, including transfers to other ING DIRECT Accounts, and make sure you’re not making more than six withdrawals each month.
- Make one or two larger transactions rather than moving money numerous times. This will reduce the number of withdrawals you make each month.
Give us a call at 1-888-464-0727 if you have any questions.
Save Your Money.
Apparently we approached (or surpassed, I haven’t checked) the six transaction limit last month, which triggered this message. If you’re interested in exactly what types of transactions count against the limit, check out this passage from Section 204.2(d)(2) of Regulation D of the Federal Reserve Board:
…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.
In plain English, courtesy of GenXFinance…
Transactions that are limited:
- Pre-authorized transfer to a third party
- Pre-authorized payment to a third party (ACH)
- Pre-authorized transfer to an individualâ€™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
Transactions that are not limited:
- In person request
- Transactions initiated via mail
- To make a payment on an in-house loan account
- Transactions via ATM
So… If you’re like us and you rely on a high yield online savings account to maximize your interest, keep an eye on those transactions. As the e-mail from ING suggested, try to group them together and make oine big transaction instead of many small transactions. Another option would be to transition to a high-yield checking account, such as an Electric Orange account, which doesn’t have such limitations.