What to Know About Savings Account Transfer Limits

Some banks limit how often you can transfer money out of a savings account. Exceeding the allowed quota of transfers via ATM, electronic bill payment or other methods could result in being charged a fee, having your savings account changed to a checking account or even having the account closed. For a long time, banking regulations required financial institutions to follow the six-transfer limit to make sure the banking system had enough ready money to function properly. That rule was changed in 2020, but some banks still cap the number of monthly withdrawals.

For help with banking or other money questions, talk to a financial advisor.

Savings Account Basics

Savings accounts are the most basic kind of bank account and represent many people’s first exposure to the financial system. They are simple and safe. Designed to help people accumulate funds for long- and medium-term financial goals, deposits to savings accounts earn interest and also feature protection against loss provided by the Financial Deposit Insurance Corporation (FDIC).

Savings accounts may be called other things, such as passbook accounts and statement savings accounts and money market deposit accounts. However, in keeping with their intended purpose of simply accumulating funds, savings accounts by any name are generally straightforward and offer only a limited set of features.

Savings accounts are oriented toward providing uncomplicated security rather than facilitating transactions as other types of accounts, such as checking accounts, do. Basic savings accounts generally do not offer check-writing capabilities or debit cards, for instance. You can withdraw some or all your funds from a savings account any time you want, but it is not as easy as it is with a checking account.

What Are Savings Account Transfer Limits?

Savings accounts have long allowed depositors to make only six transfers out of the accounts each month. Exceeding the six-transfer limit could result in being charged a fee or having the account changed to a checking account, which usually meant not earning interest any longer. Sometimes accounts over the limit may even be closed.

Depositors could always get their funds, and only certain types of transfers called convenient transfers were affected. They included debit card transactions, transfers from a computer or mobile device such as a phone, electronic funds transfers (EFTs) including Automated Clearing House (ACH) transfers and overdraft transfers to a linked checking account. In-person and ATM transactions at a bank branch, as well as phone transactions requesting a paper check, were unlimited.

Why Savings Accounts Have Transfer Limits

The original reason for transfer limits was a rule called Regulation D issued by the Federal Reserve. This rule was part of the Fed’s system of imposing reserve requirements on banks. Reserve requirements force banks to keep a certain percentage of deposits rather than lending out all the money received from depositors. This helps maintain stability in the banking system.

In 2019, the Fed decided on a different approach for managing the monetary system that affected the reserve requirements. As part of this change, it dropped Regulation D. The change was announced and became effective in 2020. At the time, the Fed explained it as a way to make it easier for depositors to handle the financial stress and bank branch closings associated with the COVID-19 pandemic. It guarantees easier access to funds.

As a result of this change, many banks dropped the limit and now allow unlimited transfers from savings accounts, such as Chase and Wells Fargo. The Fed has indicated it has no plans to reinstate Regulation D, making it a great time to look for a new savings account. Savings deposit customers who want to be able to make unlimited withdrawals from their accounts can identify these banks by checking account terms.

However, while banks were allowed to drop the six-transfer limit, they were not required to eliminate it. Many banks kept the limit, as well as the fees, account conversions and closings for violators. One example is Bank of America.

Banks’ explanations for maintaining the now-optional limit are similar to those underlying the original rationale for the Fed’s imposition of the rule–it helps them maintain adequate reserves and ensure that money will be there if a lot of bank customers suddenly want to withdraw their funds.

How Do You Find Your Savings Account Transfer Limit?

To find the transfer limit on your savings account, start by checking your bank’s official website. Most banks list account details, including monthly transfer limits, in the account terms or fee schedule. Look under sections related to savings account rules, transaction limits or account disclosures.

You can also log in to your online banking account or mobile app. Some banks show the number of transfers used in a billing cycle and how many are remaining. This can help you track your activity so you can avoid going over the limit.

If you are unsure or cannot find the information online, contact your bank’s customer service. A representative can explain how many transfers are allowed, what types of transfers count toward the limit and what happens if you go over it.

What Happens If You Go Over the Savings Account Limit?

To avoid issues with your savings account limit, check with your bank about its current transfer rules. Consider linking your savings account to a checking account to manage transfers more easily. However, if you do go over the allowed number of transfers or withdrawals, several things might happen.

Your bank may charge a fee: Some banks apply an excess transaction fee for each transfer over the limit.
Your transfer may be declined: In some cases, the bank could block the transaction from going through.
Your account could be converted: If you repeatedly go over the limit, the bank may convert your savings account into a checking account.
You may receive a warning: Some banks send alerts or notices after the first few excess transfers.

Bottom Line

Transfer limits may keep savings account customers from making more than six transfers out of their accounts during a month. This is changing, as the financial industry reacts to a federal rule change that eliminated a long-standing cap on savings account transfers that was intended to maintain the stability of the financial system. However, some banks still impose the limit on many types of transfers, charging fees, converting savings accounts to checking accounts and even closing accounts when customers do too many transfers.

Tips for Banking

A financial advisor can provide you with insight into banking regulations and how they might affect your financial plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
To find a savings account you’ll like, take a look at SmartAsset’s Best Savings Accounts evaluation of the nation’s top bank savings offerings. This assessment looks at interest rates, deposit minimums, fees and other features to help you identify a savings account that is just what you need to save for emergencies, retirement, a home down payment or any other goal.