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Federal Reserve Changes Reg D To Allow 6 Checks Per Month in Money Market Accounts


One downside to money market accounts and savings accounts as compared to checking accounts is that you are limited in the number of third-party withdrawals. This is based on the Federal Reserve's Regulation D. In short, Reg D limits the number of electronic withdrawals (like ACH transfers) to 6 per month. However, checks were limited to only 3 per month. This check limit has now changed. Effective July 2, 2009, the check limit is now the same as the other types of withdrawals. In the Federal Reserve's May press release, it described this final amendment to Reg D:
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.

I'm surprised it took me this long to notice this change, but it looks like I'm not alone. I haven't seen any banks make this change to their policies. For example, Ally Bank still lists the old 6-3 withdrawal limitation:
Why only 6 transactions per statement cycle?: 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. If you have a Money Market Account, only three of the six-per-cycle withdrawal or transfer may be made by check or with your check card at point of sale. Please remember, you will be charged a $10 fee for each transaction that exceeds these limits.

It should be noted that banks are not required to allow 6 checks per month. They can continue their same policy as long as they want. This is one reason the Federal Reserve didn't delay this new rule. So before you try to write more than 3 checks in one month from your MMA, make sure you verify with your bank that you won't be hit with a fee. If they claim you're only allowed 3 per month due to federal regulation, let them know that Reg D has changed. I've already mentioned this to an Ally Bank representative.

Savings Account vs. Money Market Account vs. Money Market Fund

There has always been confusion between the definitions of these terms. First, a savings account and a money market account are technically the same. Both are bank deposit accounts that are FDIC insured, and both have the same Reg D limitation.

Traditionally, money market accounts have larger minimum balance requirements than savings accounts. Also, money market accounts typically offer limited check writing whereas savings accounts do not. However, I've seen many cases of banks offering money market accounts that don't have check writing. So these differences are not rules.

Money market fund should not be confused with a money market account. A good explanation of the difference is described in this Bankrate article:
A money market account, or MMA, is an interest-earning savings account offered by a FDIC-insured financial institution with limited transaction privileges.
In contrast, a money market mutual fund, or money fund, carries no FDIC insurance and is simply a collection of short-term debt investments held by that mutual fund.
  |     |   Comment #1
Alliant has always had 6 checks limit.
  |     |   Comment #2
I have had a MM at Flagstar since last October.(3 checks and 3 withdrawals or debits allowed) We are building a home and I asked about what would happen if I needed to write more checks. The manager answered to come on in to the branch and he would do a withdrawal and make a cashier check for me.
  |     |   Comment #3
the notice in my Hanmi Bank statements

"Effective 7/2/09 - New rules under Reg D eliminates the "three count"
sublimits. The depositor is permitted or authorized to make no more than
six transfers and/or withdrawals, per each monthly statement cycle to
another internal or external account by means of a preauthorized
transfer, check, draft debit card, or other order made by the depositor
and payable to third parties."
  |     |   Comment #4
Thomas  Jefferson said in 1802:
'I believe that 
banking institutions are more dangerous to 
our liberties
 than standing armies.
If the American people ever allow 
private banks to control the issue of their 
currency, first by inflation,
 then by 
deflation, the banks and corporations that will 
grow up around the banks will deprive the people 
of all property -
 until their children 
wake-up homeless on the continent their fathers 
  |     |   Comment #5
Honestly, this 6 limit regulation is ridiculous. I usually only make four or so (I put my paycheck directly into savings, then put my budgeted money into checking). But since ACH is the mainstream way of transferring money now, and many people use electronic banking? The regulation should allow for 10-12 transfers - at least for electronic bankers, but preferably for people in general as lots of places use ACH today.

I avoid keeping money in checking so if my debit card or checking information get stolen I can still pay my bills on time. It's a great way to avoid financial drama just in case...It'd be awesome if they reconsider.
  |     |   Comment #6
I agree. In this day & age of electronic banking (aren't we supposed to reduce paper?) the lomit should be raised. My company requires direct deposit by ACH. They only allow for one deposit. My Credit Union then only allows me to make 6 transfwers per month from my share account. I have a christmas club, a vacation club, a loan , and a mortgage share account that I need to transfer into each week. This puts me over the limit by the second week of the month. I don't have time to go to the credit Union every week.. so i do the transfers online.  They offer this convenience.. then penaloze me!
So ridiculous
  |     |   Comment #8
I think that it's my money so it's ridiculous that I can't transfer money from my savings account to cover debits in my checking. Makes me want to put money in a jar in the ground.
  |     |   Comment #15
You actually have that choice, except that the jar in the ground is not insured by anyone backed by the "full faith and credit of the United States Treasury" ie: FDIC or NCUA, nor is it made available to you via a worldwide network of computers and ATMs.  Of course, all those systems cost "nothing" to maintain...but if you don't like those ridiculous services, go on and dig that hole in the ground. 
  |     |   Comment #16
Also, the regs require that a financial institution keep a certain amount of reserves (from earnings) for the various types of accounts - Transaction accounts (like checking or share draft accounts) have higher reserve requirements.  Reg D allows banks and credit unions to reserve less of their earning for the savings accounts as long as they are not de facto Transaction accounts.  If you need to spend the money, just put it into your checking or share draft account in the first place.  Savings is supposed to be for savings - funds you use only rarely.
  |     |   Comment #9
Regulation D Limit allows the Banks to charge a fee for 6 or more withdraws or transfers from savings to checkings,etc,etc 

I had made 6 transfers from my SAVINGS account to my 6 grandkids individual  SAVINGS accounts and all our account are in the same branch also for that, I got charge a fee.

It's the Fed telling me, not save any money for my grandkids future scholarship?

What's up with that.

  |     |   Comment #10
My credit union doesn't charge a fee, they simply shut off my ability to make more than 6 transfers from savings to checking in the same month, which means if I need to do more I have to go there in person. This section of Reg D is absolutely ridiculous and just another example of Government exerting control where it doesn't belong. It is my money, in my account, I should be able to do UNLIMITED transfers in a month as long as I have the money available to transfer. We The People need to ban together to get this section of Reg D abolished. Does anyone know how we go about doing that? Do we start a petition? Who's with me??? This is truly infuriating!
  |     |   Comment #12
Allow me to borrow and rephrase...
"If you've got bank accounts—you didn't earn that. Somebody else made that happen."
  |     |   Comment #11
I just had 200 transfered from my checking to savings for a reg D violation. The person at the bank tried to explain it to me but he didn't sound like he knew about it. Been doing everything the same for 4 years... my money I should be able to do what I want when I want with it.. is this just on savings or checking too?? Confusing as heck!!!
  |     |   Comment #13
This is very confusing to me.  Are you referring to Money Market accounts which have always had a limit on withdrawals or to ALL types of checking and savings accounts?  I would think we would have had to receive a letter from our specific banks informing us that there would be such changes to regular checking and savings before they could charge us a fee.  I think I will call Chase and find out where we stand on our checking account now.
  |     |   Comment #14
Just spoke to rep at local Chase.  Was told this does not affect our regular checking in any way.  If they did have some change that would incur charges to us, they would have to inform us in a letter months before. 

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