I recently discovered this limit the hard way, after being charged a fee for each transfer over the limit. With online banking becoming so prevalent, this is a huge inconvenience as it prevents people from structuring their savings for the best internet rates. What is the reasoning behind this rule?
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The regulators (in the past, at least) and banks distinguish demand-deposit (checking) accounts from savings accounts. Checking accounts are without such limits, but savings accounts are subject to withdrawals-per-month limitations. The overall effect of this is to slow the speed with which money flows through the savings account, thus essentially making the money remain on deposit for a longer time. That's exactly why generally savings accounts pay more interest than checking accounts. |
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Savings accounts aren't transaction accounts, so FRB Regulation D (bstpierre linked to it above) disallow more than 6 withdrawls per month. You can deposit all that you want. Traditionally, folks who have wanted to maximize earnings for a transaction account would get a money market account. In 2011, rates are so pitful for checking, savings and money market accounts that it is pretty much a waste of time to worry about it. |
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