research regulation D - thread over
Regulation D: Savings Account Transaction Limitations
Federal regulations require banks to limit the way withdrawals may be made from a savings or money market deposit account. Withdrawals in excess of these limits may result in a fee or account closure.
Customers sometimes wonder why bank accounts have different terms or pay different interest rates. One of the reasons is Regulation D:
Regulation D applies to all financial institutions.
It imposes uniform reserve requirements on transaction accounts or non-personal time deposits, defines such deposits, and requires reports to the Federal Reserve.
The regulation establishes operating parameters for each account category, such as transaction accounts (demand deposit or checking accounts) and non-transaction savings accounts. For instance, this regulation currently prohibits the payment of interest on business checking accounts.
Regulation D also places limits on the type and number of withdrawals that can be made from certain non-transaction accounts, such as savings and money market deposit accounts.
Checking accounts are deemed to be "transaction accounts", and have no such transfer or withdrawal limitations.
What accounts does it affect and how?
Savings Accounts and Money Market Deposit Accounts: During any month, you may not make more than six withdrawals or transfers to another bank account of yours or to a third party by means of a pre-authorized or automatic transfer or telephonic order or instruction. No more than three of the six transfers may be made by check, draft, debit card, if applicable, or similar order to a third party.
