Why is there a limit of 6 ACH transfers per month with savings accounts?

On April 24th, 2020, the Federal Reserve Board announced an interim final rule that removes this six per month limit on convenient transfers. This was in response to the Coronavirus epidemic and the Federal Reserve appears to have made this change permanent. It will be up to banks as to how quickly they will remove the penalties and the limits (which they “said” existed only because of the Federal Reserve rule).

Did you know that you’re limited to just six (6) transfers out of a savings account each billing cycle?

If you go over, you could get in trouble. Most banks will even fine you.

Bank of America calls it a Withdrawal Limit Fee and will ding you $10 for each withdrawal or transfer above six (limited to $60). Unless you have a minimum daily balance of an amount that varies with each savings account type. Their Regular Savings requires a minimum daily balance of $20,000 to avoid this fee. (fee schedule, it’s on page 4)

Ally Bank will charge you $10 per transaction over the limit. There’s no way to avoid it, just in case you had $20,000+ lying around and a desire to make more than six transfers a month you crazy cat you.

Six seems like a lot but if you have unlimited overdraft protection, which is an automatic transfer, it could happen pretty easily (that’s how I discovered this limit and fee!).

Table of Contents
  1. Why does this six transfer limit exist?
  2. What counts as a transfer?
  3. How to get around this limit
  4. Why the fee?

Why does this six transfer limit exist?

It exists because your account is considered a “savings deposit” and they’re subject to different rules.

Why those rules exist has to do with the reserve requirements, or how much the bank needs to keep around in their vaults, on different accounts. The rules regarding those requirements gets complicated and are updated each year depending on what the Fed is hoping to accomplish, so I won’t go into it (and it’s not relevant).

Section 204.2(d)(2) of Regulation D of the Federal Reserve Board’s definition of a “savings deposit” defines the limit:

the depositor is permitted or authorized to make no more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle . . . to another account (including a transaction account) of the depositor at the same institution or to a third party by means of a preauthorized or automatic transfer, or telephonic (including data transmission) agreement, order, or instruction, and no more than three of the six such transfers may be made by check, draft, debit card, or similar order made by the depositor and payable to third parties.

You can see it quoted here in a letter from the Federal Reserve in 1996. It’s also repeated again in this document, which is far easier to read than the regulation.

A few additional points:

  • The limit is only on “convenient” transfers and withdrawals, like preauthorized or automatic transfers.
  • It’s only a limit on your savings account. You can have an unlimited number of transfers from a checking account.
  • Not in the above quote but “institutions must reserve the right at any time to require at least seven days’ written notice of an intended withdrawal (in practice, this right is rarely, if ever, exercised).” Technically, you can request a withdrawal and they can sit on it for 7 days!

What counts as a transfer?

Anything “convenient” counts towards this limit of six.

A “convenient transfer or withdrawal” is:

  • Preauthorized, automatic transfers (including overdraft protection and bill payments)
  • Initiated by phone, fax or computer
  • Made by check, debit card, or other similar order made by you to a third party.

It feels a little arbitrary what convenient means but that’s the rule.

This is why you need to pay attention to how you transfer money from bank to bank. Do it too many times in the wrong way and you could get dinged.

How to get around this limit

Make bigger, but fewer, transfers? Then you don’t hit six and six is a lot.

Or, you can make “unlimited withdrawals by mail, messenger, ATM, in person, or by telephone (via check mailed to the depositor).” These aren’t considered convenient and don’t count against the limit.

If you need to make a transfer, you could withdraw it from the ATM from savings and then deposit it into checking. Or you could walk up to a teller and make the transfer.

Why the fee?

Because a bank can? And because it makes it so you pay attention?

If they keep letting you go over the 6 transfer limit, they have to reclassify it as a transaction account… which is a pain. They would much rather you not go over but until you learn, they’ll happily collect ten bucks a pop.

Now you know why there is a six transfer limit – go impress your friends. 🙂

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

>> Read more articles by Jim

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  1. The Money Wizard says

    Interesting article. The more you know…

    With interest rates so low and preferring to keep my money aaalmost 100% invested, this is partly why I just keep my emergency fund in liquid assets and the rest in a checking account.

    • Henry says

      The interest differential between savings and checking accounts have narrowed considerably after the Federal Reserve pushed rates down to near zero. So moving more money to checking accounts versus savings accounts will not result in a large drop in earned interest per month. In a few odd situations, some banks have checking account interest rates higher than those of their savings accounts.

      • Jim Wang says

        Those accounts, typically called reward checking accounts, generally have a spending requirement on their debit cards so they can earn transaction fees. They use those fees to pay for the higher interest rates on checking accounts.

        • Henry says

          Yes, many banks offer reward checking accounts that have higher interest rates than their other accounts. I have come across a very few where a non-reward checking account rate is higher than the money market savings rate at a very small number of banks. I think those banks are trying to promote the opening of checking accounts by offering a higher rate. They are not referred to as a promotional rate, but of course, the rate is subject to change.

  2. Michael says

    Banks limit the number of withdrawals to 6 times per month. Usually, there is no limit to the number of times you can put money into a savings or money market account per month.

    • Henry says

      Savings account are meant to receive funds (savings) and not send out funds (spending). When the account has high incidents of spending, it can no longer be looked upon as a savings account.

  3. ESI Money says

    I found this out about a month ago when Chase warned me I was about to hit my “limit”.

    I didn’t even know I had a limit!!!

    Now I transfer as much as I want using my CHECKING account.

    • Hillori Sartin says

      Chase didn’t even warn me. Just charged me a fee. I never heard of this before, but I put the lady in a corner when I read her the part that says atm withdrawals don’t count. This is absurd. Charging me for using the money I put into my account!

      • Ron says

        Why, Really ? It’s My money Not the Federal Reserves and or Banks or Any Government Agency. Do the “limit” how many times I make a Deposit ? Why not ? That will change the available money on hand at the Bank… I just got hit from Chase for $25 for 5 transfers, $5 for 5 transfers… Monday I’ll be CLOSING my Chase Account…

        • Jim Wang says

          If you kept it in a checking account, you wouldn’t have been affected by this – it’s because savings accounts have different rules. It’s a Federal Reserve rule and not a bank’s rule, they’re just following them.

          • Dc says

            Jim, you miss the point of his frustration and comment… Why can the fed make rules on how you access YOUR money, why must you do things in a specific way because a rule that makes no sense other than to control YOUR money???
            The reason for this is the banks use savings accounts for their own profit… if everyone pulled their money from a savings account banks would lose money and hinder their loan process… Hence why the Govt steps in to make a rule…
            I don’t put my money into a bank for them to make money off
            of it….

          • Jim Wang says

            I don’t miss the point, I don’t agree with the premise. The Fed makes rules on a type of account – the savings account. You can open a checking account and have as many transfers as you like.

            If you don’t like it, don’t use a savings account!

    • Edward C Noonan says

      It’s not the “government” it is the FEDERAL RESERVE BOARD which has NOTHING to do with the government. There is no lawful basis for this crap, but is a “regulation” the FED is burdening us with!

      • Jim Wang says

        The Federal Reserve System was created by Congress to act as a central bank for the United States and as such establishes rules and regulations for banking. There is lawful basis… but you can always just use checking accounts and not have to deal with any ACH transfer limits.

        • John says

          Wang you must work for a big bank raking in other peoples money either in fees or paying them peanuts while you make big cash investing their cash. Because this is the only way you think this is ok. Call your congressman and senators folks this is B.S.

        • suzy says

          It is federal reserve regulation D. The fed requires banks to deposit funds into an account as part of the FDIC requirements for “transactional accounts”. Savings and CD accounts are not transactional accounts by definition so the fed does not require banks to deposit funds. This regulation has been around for years and years and years. Only people who violate the requirement will probably be aware of it. Needless to say, every one who is complaining should have read their deposit agreement when they opened the account or looked at the advertising disclosures. It is there!

  4. David Cohen says

    If the number of “convenient” transactions exceeds six and the institution need to reclassify the account, it then must keep a higher percentage of its assets in cash, so it is disadvantageous for them to have to do that.

    • Jim Wang says

      I updated the post to be correct, I missed a spot where I had said it included transfers IN when the limit only counts for transfers OUT.

      • Andrew says

        If that’s the case, why does Citi bank display the following when setting up a recurring transfer:
        “Due to Federal regulation, you can only make 6 transfers into or out of your savings or money market account(s) during any statement period”

        Notice the “INTO or out of…”

    • Jim Wang says

      The fee can sometimes be even higher than $10 but it doesn’t go towards anything.

      • Cindy Coffey says

        Wells Fargo charged me $15 and stopped notifying me I was reaching my limited in my opinion it was just so that they could collect the fee

        • Jim Wang says

          I don’t think banks like to collect this fee because if this happens too much to them, they can get in trouble (in theory).

          There are only a handful of banks that remind you that you can only transfer 6 times. Only recently did I see a small warning on my Capital One 260 account during a transfer.

  5. James W Ballinger Sr says

    This is a ridiculous fee since banks charge an excessive fee for an overdrawn check. In addition, while one may earn perhaps 0.05% on any money saved, but a bank will charge up to 10% on a simple loan.

    Al Capone was more fair!!!

    • Betty says

      Ah, but all those fees banks charge mean even greater profits, and a giant paycheck for the bank’s CEO, who’s got a ton of tax-sheltered investments to help ensure his offspring will never have to work for living. Sick!

  6. Lael says

    That’s absolutely ridiculous that anyone is able to dictate how many times you can move your OWN money.

    • Jim Wang says

      You agree to it when you create a savings account. They don’t want the account to be heavily transacted because they only hold a small percentage of those funds on hand.

    • Henry says

      When you give your money to a third party, that party has taken control of your money. You have some access to it (remember that deposited checks access is not immediate). If you put your money into a safe deposit box and the bank is closed indefinitely, you don’t have any access to the money unless you get access to the building in a nefarious method. The regulation to minimize transaction activity is related to capital reserves and solvency requirements for the bank. If you do not want any limitations to the access of your money, better not put it into any bank and into the hole in your yard.

  7. Ed says

    I only have a Debit Card and found out about this RULE when I transferred money eight times in one month from MY savings account into MY checking account. I’ve tried to limit my exposure to unauthorized debit card transactions of thief’s by transferring enough money from savings to checking to cover a withdrawal I made.
    First Federal Bank fined me $10 and said that if it happens again, they will cancel my savings account…..didn’t say what they would do with my money.

    USA citizens are not nearly as free as our government tries to say we are…..

    • Henry says

      You violated the provisions in Regulation D by going over 6 withdrawals per statement cycle. If the events recurs multiple times, the bank can close your account and convert it to a checking account. Your funds will either be moved or they could be sent back to you after closure.

  8. Ryan says

    So, if I have it right. You can transfer numerous times from a checking (considered a transaction account) to another checking (transaction account) with no issue. But you cannot transfer more than 6 times from saving because then it would then be classified as a “transaction account”. If it was then classified as a transaction account, then why the fees? There are no fees from transfers between transaction accounts. It makes no sense to me. So we fine the customer for using saving as a transaction account, but they favor transferrers between transaction accounts and charge no fee…It makes no sense to me.

    • Henry says

      You are charged fees because the status of your account is still a savings account, NOT a checking account. Until the account is converted, you will incur fees for violations of Regulation D for savings accounts.

      The bottom line is that you CANNOT treat savings accounts like checking accounts and will be charged if you violate Regulation D. Savings account are not meant to be transaction accounts. Stop mixing apples with oranges.

  9. Ella says

    I read one place that telephone transfers don’t count and another place they do count. Will someone answer this please

    • Henry says

      Each bank has its own definition regarding what is considered a withdrawal as it applies to Regulation D. For example, some allow unlimited ATM withdrawals and do not count them under the six maximum limit per statement cycle. Another bank could count them under the six withdrawal limit per statement cycle. It depends on each bank own rules. Best to ask each bank directly.

  10. Peter says

    What I still wonder is how was the number settled to be at 6 instead of something like 5 or 10 per month.

      • Henry says

        This is just a guess, but perhaps the six withdrawal limit is based on the presumption that the authors of the rule decided to allow a withdrawal every five days per month (or six times in a 30 day month). That allows you to take money out at least one time per week during the month. They considered anything beyond that to be treating the account as a checking account.

  11. Jim says

    This is the stupidest thing in banking and needs to be changed. It is not customer friendly and another way to gouge the customer just like ATM transaction fees. We as consumers need top demand that profiteering stop with the greed of the institutions.

    • Henry says

      If you need to withdraw money many times per statement cycle, then a savings account is not the place to put that money. To avoid fees, either put them in a checking account or your in-home safe or mattress. By definition, a savings account is a place to put money into it, not taking it out. Taking it out means that you are NOT saving.

    • Henry says

      Note that some banks have suspended the six withdrawal limit for savings accounts on a temporary basis due to the Covid-19 pandemic. This suspension is not permanent and will likely be reinstated at a future time (assuming that the pandemic does not create a global economic depression).

  12. Nicole P says

    Question regarding transfer limits between different institutions with savings accounts on both sides. In preparation for a house payoff effort, I’ll need to transfer a large amount of cash between these accounts in order to wire the money from a preferred institution. I understand the limit in number of transfers allowed (6)…what I cannot seem to find out is if there is a limit as to how much is transferred at one time. Is there any concern going over $10,000 in this type of situation?

    • Jim Wang says

      I don’t believe there is a limit to the amount and you don’t need to worry about $10,000 – that typically refers to large cash (currency) transactions. They don’t worry about electronic transfers because there’s already a “paper” trail.

    • Henry says

      The $10,000 reporting rule for cash transactions is to detect money laundering activities. Many drug dealers and criminals handle cash in their business, so they have to deposit it by that means into financial institutions. The Treasury Department requires you to file a form to report cash transactions involving banks that are over $10,000. Wire transfers do not involve physical cash, so you are fine. The problem only is a problem when physical money bills or coins are involved. So putting in a cache of US Gold one ounce coins will require you to report it.

  13. James says

    Clearly this is discriminatory in nature. Chase continues to charge me this penalty frequently. If I have a balance of $15,000.00 and above, no penalty. My balance fluctuates above and under. If this is such a big deal in how banks operate, why wouldn’t they ding everyone? It’s ok for the, but not for me mentality.

  14. Deb says

    If my friend sends me money using Zelle and I set the funds to deposit into my savings account, will that count towards my “6 transactions”? I cant seem to find a straight answer anywhere. That is a “convenient” transaction as mentioned above.

    • Jim Wang says

      Technically, yes, but they lifted that rule so it shouldn’t apply to you anymore.

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