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Excessive Withdrawal Fees from Bank of America, Citi, Wells Fargo and Ally

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Excessive Withdrawal Fees from Bank of America, Citi, Wells Fargo and Ally

A common fee for savings accounts is the excessive withdrawal fee. This was one of the five common banks fees that I mentioned yesterday. In many cases, banks are just abiding by federal regulation that limits the number of allowed withdrawals from money market and savings accounts. However, in other cases some banks charge fees when the number of withdrawals is less than this limit.

First, there was an important change last year to the federal regulation that governs withdrawals on savings and money market accounts. The number of withdrawals per month allowed by check from money market accounts was increased from 3 to 6. Here's an excerpt from the Federal Reserve press release that was issued last year:

The Board has revised Regulation D's restrictions on the types and number of transfers and withdrawals that may be made from savings deposits. The final amendments increase from three to six the permissible monthly number of transfers or withdrawals from savings deposits by check, debit card, or similar order payable to third parties. Technological advancements have eliminated any rational basis for the distinction between transfers by these means and other types of pre-authorized or automatic transfers subject to the six-per-month limitation.

All of the details of Regulation D are located here, and the details specific to savings and money market accounts are in Section 204.2.

Some banks still maintain the 3-per-month limit for checks. The regulation does not require banks to allow 6. They're just not permitted to allow more than 6. So you may still be charged fees if you write 4 to 6 checks from your money market account.

I've reviewed the withdrawal policies for savings and money market accounts from four large banks. In summary, Bank of America starts charging fees after only 3 withdrawals from its regular savings account. Citibank still states that its policy is that no more than 3 of the six withdrawals can be made by check. Both Wells Fargo and Ally Bank allow the maximum number of withdrawals permitted by Regulation D. Over that limit, both start to charge a fee. I've included the details below:

  • Bank of America - Regular Savings Account has an excessive withdrawal fee of $3 for more than 3 withdrawals per month if your minimum balance is less than $2,500 (It's based on rules for Texas. It may vary by state.)
  • Citibank - The Savings Comparison page states the following regarding the transaction limitations:
    Regulation D limits the number of certain types of transactions that you can make from your savings or money market accounts to six per statement period. For money market accounts, Citibank's policy is that no more than three of those six transactions can be made by check.
  • Wells Fargo - The Money Market Savings page has the following small print:
    Regulation D limits certain types of withdrawal and transfer transactions you can make out of your savings or money market accounts to a maximum combined total of six (6) per month or monthly statement period. An Excess Activity Fee may apply for each transaction that exceeds the limit.
  • Ally Bank - In Ally's money market account page, they list a $10 fee for each transaction exceeding 6 per statement cycle. They mention the following regarding why it's 6:
    We'd give you more if we could. The limit is actually set by federal law for electronic and telephone transactions from all U.S. savings and money market accounts. Remember deposits are unlimited.

  Tags: Ally Bank, Wells Fargo Bank, Bank of America, Citibank, savings account, money market accounts

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Comments
27 Comments.
Comment #1 by Anonymous posted on
Anonymous
Does an ACH withdrawal initiated by another institution count against the limit of 6 transactions?

1
Comment #2 by Anonymous posted on
Anonymous
to #1 yes i believe it does...the only ones tat i know dont count are withdrawals in person at a teller

1
Comment #3 by 51hh posted on
51hh
The ACH withdrawal initiated at the bank does not count (e.g., an ACH withdrawal from linked West Bank to Ally; initiated at Ally). 

2
Comment #4 by darkdreamer4u posted on
darkdreamer4u
A nice feature at Ally is that they tell you how many 'Limited Transactions' you've made on your savings account. It's shown right below the Next Statement Date and is more or less in real time.

9
Comment #5 by Anonymous posted on
Anonymous
Any withdrawal usually counts towards your maximum, though some banks don't count micro-withdrawals (Ally does).  Here's an idea: if the account has no minimum balance requirement, get more than one account with same bank, and split your balances.  Or get a checking account with the same bank.

2
Comment #6 by Anonymous posted on
Anonymous
I've been told by Ally phone reps that you can request a manually coded transfer from one Ally account to another over the phone.  This would be like going into the bank and doing the withdrawal yourself, so it would not account against the Regulation D limit.  Unfortunately, transfers made between Ally account using the web site still count against the limit.  I've put in a request to have the web site coding fixed to recognize these internal transfers so they don't account against the Regulation D limit.

1
Comment #7 by Anonymous posted on
Anonymous
According to a CSR at Ally, your ATM withdrawals from your money market account are unlimited and do not count against the 6 withdrawals.  I believe point of sale transactions are part of the 6.

1
Comment #9 by Anonymous posted on
Anonymous
Bank of America is HORRIBLE.  I called them a week ago to confirm that I could make up to 6 withdrawals from my savings account, and the customer service person said "yes." I clearly asked if there would be any fee, and was told "no."  I have always done 3 or fewer withdrawals per statement period.  This month I needed a 4th.  The withdrawal went through, and they charged me a $3 fee, which I only saw upon reviewing my end-of-month statement online. I called customer service to ask about the fee, and the rep was HORRIBLY unprofessional as he told me that "the government makes us charge the fee.  If you want it refunded, you'll have to ask the government to refund it to you."  I am going to close my accounts at Bank of America and recommend the same to all my friends.  I have already convinced one other friend to drop BOA since he was charged too many fees in the past.  GOODBYE BANK OF AMERICA.  You suck!

9
Comment #10 by Anonymous posted on
Anonymous
http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div5&view=text&node=12:2.0.1.1.5&idno=12#12:2.0.1.1.5.0.2.2

 

Your "savings deposit" account type is defined here, and so is the six-witdrawals-per-four-weeks limit. It is also true that ATM withdrawals are exempt, as are withdrawals made by mail and by teller.

 

I was about to close my Bank of America accounts over this, but it looks like the Feds are to blame, and I'd have this very same problem no matter what institution kept my money.

1
Comment #11 by Pam Jenkins (anonymous) posted on
Pam Jenkins
Fifth Third just took $15.00 out of my savings for excessive transfere to checking. It's Christmas!!!!!! Couldn't believe they could do that!

1
Comment #12 by Anonymous posted on
Anonymous
In Los Angeles, CA Bank of America charges $9 service fee for excess withdrawals!!!  I got paid .22 interest and they took NINE BUCKS!!!  I called and had my fee credited to my account but it is SOOO  ANNOYING!!! 

I had 3 transfers to checking and 2 ATM withdrawals.  Good to know that ATMs are not supposed to count as excessive transfers.... at least I have my argument for next time.  I'll be studying the law.  What the heck is the Federal Reserve thinking!!!!  I'm gonna dig a hole in my back yard and keep my own money.  This is financial suppression and slavery !

3
Comment #13 by Anonymous posted on
Anonymous
A savings accuont is for saving, not checking.  I have banked with BoA for a decade now and have never been charged any such fees.

Here is a secret tip:  So long as you transfer at least $25 every month from checking to savings, the monthly $12 checking account fee is waived.  I set this up on auto-pay every month.

And it makes no difference if you take them money right back out again.

I started doing that five years ago and have paid NO FEES whatsoever to Bank of America.

Again, a SAVINGS account is for SAVING.  If you start using it like a checking account, they will charge you fees.  You can have BOTH savings and checking accounts and transfer money online between the two.

Is there some reason you are using a Savings account as a checking accout?

 

2
Comment #14 by Anonymous posted on
Anonymous
Who keeps this fee? And is it legal for them to charge it?

1
Comment #15 by Raj (anonymous) posted on
Raj
i have been using online banking in India and Australia and i am never charged for such a stupid thing.. this is really rip off, US banks taken their customers for granted..i am not happy with US banks..its because of poor economy they are charging so that way they can make extra money..

1
Comment #16 by MG (anonymous) posted on
MG
ATM withdrawals or in-person withdrawals SHOULD NOT count against the 6/mo limit on TRANSFERS (meaning, transfers FROM savings to other accounts at the same institutions or payments to third parties by wire transfer, money order, debit, etc.)... They appear to be specifically excluded...

http://www.federalreserve.gov/boarddocs/supmanual/cch/int_depos.pdf

"Other, less-convenient types of transfers, such as withdrawals or transfers made in person at the bank, by mail, or by using an ATM, do not count toward the six-per-month limit and do not affect the account’s status as a savings account."

http://www.federalreserve.gov/boarddocs/legalint/FederalReserveAct/1997/19970320/

"As it is generally more convenient to make a transfer at home than to go to a branch, withdrawals or transfers in person at a branch are unlimited. Withdrawals from an ATM machine, which involve more inconvenience than home banking, and transfers by mail or to repay loans from the institution (other than overdrafts), are also unlimited."

http://www.federalreserve.gov/boarddocs/legalint/federalreserveact/1997/19970121/

"The definition specifically excludes from the three and six per month limitations arrangements that permit 'transfers of funds from [the savings] account to another account of the same depositor at the same institution or permits withdrawals (payments directly to the depositor) from [the savings] account when such transfers or withdrawals are made by mail, messenger, automated teller machine, or in person.' Id."

I mention these because Chase Bank has started charing excessive ATM "Savings withdrawal Limit Fees" of $5/transaction for each transactino over 6/mo, when it appears ATM withdrawals are specifically EXCLUDED from said maximums... Evil corporation. How I dislike thy practices...

If anyone else is getting dinged for ATM withdrawals by Chase, or really any other bank, they can't hide behind Regulation D, 'cause it appears to specifically exclude ATM withdrawals, in-person withdrawals from a teller, etc. The less-convenient methods of utilizing your money (vs. online banking from home, telephone transfers, etc.).

Good to know?

3
Comment #17 by Chyvan (anonymous) posted on
Chyvan
While it's true  that ATM, in person, and by mail withdrawal instructions aren't subject to the Reg D limit of 6, if a bank discloses that they charge a fee regardless of the type of withdrawal, then it's perfectly within their right to do so.  I banked at a CU that charged after 3 even though they had no obligation to do so, they just chose to.

The converse is also true, they're not required to charge a fee after 6 if they don't want to.  However, they are required to discourage the practice, and  the Fed agrees that charging a fee accomplishes  that end.  However, even if you pay the fee, there comes a point that if you exceed the limit month after month, the bank is required to convert your savings account to a transaction (checking account) or close  the savings account to make you stop exceeding the limit.

2
Comment #18 by Anonymous posted on
Anonymous
I bank with wells and 37.50 is what they have been taking. I am new in d country and did not realise this. In total just in the last few months they have taken hundreds from me, can I claim this money back and how pls

1
Comment #19 by Nicole (anonymous) posted on
Nicole
Horrible! Wells Fargo is horrible.  A lot of my family members switched from wells fargo because of the excess fee's they've gotten ridiculous, and the customer service is rude to add on to that. I wanted to close my savings account after the excess fee's and when I brought it up to the woman in customer service she was happy to do it! Didn't care either way. STAY AWAY FROM WELLS GO TO A CREDIT UNION

2
Comment #20 by iji (anonymous) posted on
iji
With wells fargo it does not matter if you have a checking and a savings account.  If you transfer between the two accounts online it counts against your limit of six.  Plus they only contact you after the fees have been collected.  No the money does not go to the federal reserve board.  It is just a limit they do not want the banks to go over.  There is no fee to the bank for you going over this limit.  It boils down to being another revenue stream for our crooked banking system.

2
Comment #21 by Anonymous posted on
Anonymous
I have a Savings Account with Bank of America in Massachusetts.  Bank of America just charged me $75 for "Fee For Transactions Exceeding the Legal Limit."  No notice was received.  No email.  They just took the money.  WTF.

2
Comment #22 by Anonymous posted on
Anonymous
My son who is a full time student & has an account with TD Bank in New Hampshire was just hit with a $9 fee 3 times during March for "EXCESS TX FEES".  I was told these could not be credited because it is a federal rule.  Does anyone know if this is true?  He has had this account for over a year & this was the first time they did this - NO kind of notice or email or warning of any kind - Just took the money from what little savings he had.  Told they just started enforcing this in January.   Not sure what to believe or if I have any options.  If you cannot use your own savings acct to cover things you have to pay with your checking then no reason to keep a savings acct I guess.  Makes no sense to charge 9.00 for a transfer on line. 

3
Comment #23 by Anonymous posted on
Anonymous
I hate to say this but, It's my money I should be able to do anything I wish to do with my money.  If they want me to keep my money in a savings account.....give me a reason. Higher % rates on the money I don't touch.  Leave my money alone it's all I got!

4
Comment #24 by sbh (anonymous) posted on
sbh
My bank started charging this fee $3 per transaction after 2 transactions. Stupid me - I did not realize this until this month and now it has been 15 months. This came to a total of $567. I feel this is my money and we only use the banks ATMs. Why did they not convert the account to a checking account, because they would NOT have been able to steal $567 of MY money. 

2
Comment #25 by Anonymous posted on
Anonymous
please check your health ratings for both bank of america and citibank.

1
Comment #26 by Randall Lind (anonymous) posted on
Randall Lind
I had a saving accoun t at BofA and I took $25 out the deposited $70 and another $25. B0fA charge me $6 saying they don't care if I deposit or withdraw 3 trasnaction a month I am charge no matter what. I told them **** that and close it.

I can see if I withdrawn 3 time but putting money they charge a fee wtf?

1
Comment #27 by Anonymous posted on
Anonymous
I am fixing my home up so I was taking 500 here 1000 there total of 14 times and I got a letter that I cant do this,so I transfered 15,000 to my checking,and problems solved,they loose the 15,if I need more will do it again..the reason I am angry is they could have called or wrote me about this policy I was not aware of.I always put 90 p/c of my cash after bills in savings,I never knew you cant take it more than 3 times a month,the nasty letter took me within seconds of going elsewhere from B of A ,but it would be annoying,their always asking us to do this ,try that in our checking ,if I want somethig I will ask,I wish they'd keep their schemes to themselves and [people who care.........THEY SAID THEY WOULD MAKE MY SAVING A CHECKING ACCOUNT IF I DIDNT STOP,WHAT A GREAT WAY TO KEEP PEOPLE,WELL LETS SEE IF THEY DO IT,i WILL IMMEDIATELY CHANGE BANKS,and if they notice my  account this year is growing fAST and never before did they see deposits like they have been seeing,another bank will be glad to have me and maybe hire people who are polite

1
Comment #28 by darkdreamer4u posted on
darkdreamer4u
To #27:

That is the difference between a savings and a checking account: you're supposed to save money in a savings account, i.e., leave it there and (hopefully) let it accrue interest - for multiple withdrawals and other transactions you have a checking account. DUH!

I'm sure when you read the small print, you'll find some paragraph explaining things.

1