A year ago, as the
US economy shut down during the pandemic
and millions lost their jobs, the
Federal Reserve Board changed a banking rule
to give people easier access to the money in their savings accounts.
اضافة اعلان
The board allowed banks and credit unions to offer customers
unlimited withdrawals or payments from savings accounts each month. The change
also applied to money market accounts — hybrid accounts that typically pay
slightly higher interest rates and that come with an ATM card and limited
checking privileges.
The change, the board said, would allow consumers to get
their money more easily, “at a time when financial events associated with the
coronavirus pandemic have made such access more urgent.”
Before the pandemic, a federal banking rule capped at six
the number of withdrawals or transfers that customers could make monthly. When
customers exceeded that limit, banks often charged a fee — $5, $15 or more.
Banks sometimes warned customers that they would close the account or convert
it to a checking account, which often pays little or no interest, if customers
repeatedly exceeded the cap.
The rule change, however, didn’t require banks to drop the
limits. Some banks temporarily suspended their caps and accompanying fees,
allowing customers unfettered use of their savings. But others kept both limits
and fees in place, and continue doing so, even though the rule change appears
to be permanent or at least long term, said Ken Tumin, founder and editor of
DepositAccounts.com, which has tracked banks’ policies.
According to its response to frequently asked questions on
its website, the Federal Reserve “does not have plans to reimpose transfer
limits” but may make “adjustments” to the definition of a savings account “if
conditions warrant.”
Some institutions, in their account disclosures, still cite
the federal regulation as the reason for imposing the limits and charging the
fees. But, Tumin said, “it’s because of their policy, not the federal
regulation anymore.”
Because banks vary in their approach, it makes sense to
check how yours handles savings withdrawals so you can avoid any surprise fees.
It’s especially important to avoid excess fees because current interest rates
on most savings accounts are already anemic, and a fee can eat into monthly
interest.
American Express' online bank offers a high-yield savings
account for which it increased the maximum number of withdrawals to nine from
six per statement cycle to “provide increased flexibility” for customers, said
spokesman Andrew Johnson. The bank doesn’t charge fees but cuts off transfers
after the ninth one, he said. To withdraw money in excess of the cap, customers
must call the bank and request that the funds be sent by check. The savings
accounts “are not meant for everyday spending,” the bank’s website says.
Ally Bank, also an online institution, charges a $10
“excessive transaction” fee after six withdrawals, but it is “temporarily”
refunding the fee to help customers affected by COVID-19, its website says.
Online bank Marcus doesn’t mention fees on its website, but
it notes, “At this time, there is no limit to the number of withdrawals or
transfers you can make.”
Chase Bank limits savings withdrawals to six and charges a
$5 fee on any over the limit — even for withdrawals made at a branch or an ATM,
which were exempt under the old federal transaction rule. The bank waives the
fee on its “premier” savings account if the balance is at least $15,000.
“Our savings products are designed for customers to set
aside funds for emergencies and long-term goals, not typically to be used as a
primary operating account for making regular withdrawals,” Chase spokeswoman
Elizabeth Seymour said in an email.
Bank of America sets a cap of six withdrawals and transfers,
and charges $10 for each deduction over the limit, up to a maximum of six fees
— $60 — per statement cycle. (You won’t be charged the fee if you have a
minimum balance of $20,000 or enroll in the bank’s “preferred rewards”
program.)
Citibank ended withdrawal limits this month and didn’t
previously charge fees, a bank spokesman said.
Here are some questions and answers about savings account
fees:
How can I avoid excessive savings withdrawal fees?
Set up text or email alerts to notify you when you are
approaching the account’s limit. You can also consider using a line of credit,
rather than linking your checking account to your savings account, to cover any
overdrafts and reduce unnecessary transfers.
Also, savings-withdrawal limits apply to the number of
transactions, not the amount. If you know you’ll be needing some cash from your
savings account, consider making one or two larger withdrawals instead of
several smaller ones, said Greg McBride, chief financial analyst at
Bankrate.com. (Separately, some accounts may limit the total amount of cash
that can be withdrawn or transferred in a single transaction.)
What are current interest rates paid on savings accounts?
Even on “high yield” accounts at online banks, which
typically pay higher rates because they have no branch network to maintain,
annual percentage yields hover around 0.40 percent or 0.50 percent — far below
what those accounts typically paid a year ago. Still, that’s better than the
average savings account rate of 0.14 percent, according to DepositRates.
What if I need to withdraw money in excess of my account’s
transaction limits?
Contact your bank to discuss your situation and ask for a
waiver of the fee, McBride said. Banks are likely to be flexible, given the
continued economic fallout of the pandemic.
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