Federal Reserve Removes Limit of 6 Withdrawals for Savings Accounts
The Federal Reserve Board announced last week that it will temporarily remove the six-per-month limit from the “savings deposit” definition. The interim rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.
This does not mean that all banks will implement this change, but just says that now they are allowed to. If you need to dig into your savings during these tough times and need to make more than 6 withdrawals, make sure to check with your bank.
This limitation is the basis for distinguishing between checking and savings accounts at banking institutions.
Here’s a relevant part of the notice that was posted on the website:
The Federal Reserve Board on Friday announced an interim final rule to amend Regulation D (Reserve Requirements of Depository Institutions) to delete the six-per-month limit on convenient transfers from the “savings deposit” definition. The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.
The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.
The regulatory limit in Regulation D was the basis for distinguishing between reservable “transaction accounts” and non-reservable “savings deposits.” The Board’s recent action reducing all reserve requirement ratios to zero has rendered this regulatory distinction unnecessary.
Concurrently, the Federal Reserve is making temporary revisions to the FR 2900 series, FR Y-9, and FR 2886b reports to reflect the amendments to Regulation D.
You can read the full document here for Regulation D: Reserve Requirements of Depository Institutions (PDF).
HT: Doctor of Credit
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