Comments on: Six withdrawal limit for savings accounts

By: Carnival of Personal Finance #206 | Keep My Dollar

Carnival of Personal Finance #206 | Keep My Dollar — Mon, 25 May 2009 13:29:57 +0000

[...] Six Withdrawal limit on savings accounts – Gather Little by Little [...]

By: DDFD at DivorcedDadFrugalDad.com

DDFD at DivorcedDadFrugalDad.com — Tue, 12 May 2009 03:11:06 +0000

Thanks for reminding me about this! I had forgotten about this aspect of savings accounts.

Another reason I am a firm believer in multiple bank accounts . . .

By: glblguy

glblguy — Mon, 11 May 2009 21:19:55 +0000

@MyJourney – Good question. My Checking account is my emergency fund which has at least $1000.00 in it all the time. I don’t want that money being available to any of the service companies connected to my firewall account.

By: MyJourney

MyJourney — Mon, 11 May 2009 17:00:25 +0000

GLBL,

Why not just make the ING checking account your firewall account? The only difference is the interest rate, but at today’s rates and considering you “keep it at $0 99% of the time” you are probably only losing 30 to 80cents post tax per year.

Some reasons I could think of all have to do with the time it was enacted:
1) People tell me ATMs weren’t always around (and weren’t popular until mid to late 90’s). I say people tell me, because I was born in 81 and just always remember atms. So banks probably wanted to limit the wasting of teller’s time.

2) Computers didn’t keep track of the score, so it would be easier to withdraw money in multiple banks without reconcilation on their part.

Just some thoughts

By: Funny about Money

Funny about Money — Sun, 10 May 2009 14:15:16 +0000

Interesting. I knew there was a limit on the number of withdrawals you can make from a money market account, but never realized there was any such restriction on savings accounts. Luckily, I’m so cheap that deposits to savings go into a black hole, never to come out!

By: Stew

Stew — Sat, 09 May 2009 21:39:34 +0000

I have almost had my FNBO Direct Savings account shut down for the same reason – and I was transferring money internally to the FNBO Direct billpay!

I think that Paul is on the right track and I think that it also has something to do with interest accrual and the average daily balance. The reason that banks offer a higher interest rate on CD’s is because they know that the money is locked in for a set period of time. They also need to make assumptions about savings account balances.

By: Paul

Paul — Sat, 09 May 2009 13:32:40 +0000

I’m not a bank regulatory expert, but I’d speculate the limitation is driven by the reserve requirements (i.e. I’d guess accounts with unlimited withdrawal rights have higher reserve requirements).

By: Amy

Amy — Sat, 09 May 2009 01:24:06 +0000

My credit union has it set up online to where it tells me how many I have made and how many are still available. If I try to exceed the limit, it just doesn’t work. The money stays in the savings account.

By: glblguy

glblguy — Fri, 08 May 2009 21:01:11 +0000

I researched and researched on that same questions and couldn’t find a clear answer. Hopefully somebody else might know.

By: Craig

Craig — Fri, 08 May 2009 17:16:38 +0000

What is the reason for that regulation?