Be Careful Not To Exceed 6 ACH Transfers On Your Savings Account Per Month

I was routinely checking my Citibank balance online the other day when I noticed a little warning box above my account balance mentioning something about a savings account transfer limit of 6 per statement cycle imposed by a federal rule called Regulation D. I had heard about it before but never previously paid it much attention. Examining the reminder message, it was clear to me that this was something that might easily be overlooked by the average savings account holder. It’s the type of important information that should be, but isn’t readily advertised enough by banks.


Banks Place A Limit On The Number of ACH Transactions You May Execute Per Month

Bank savings and money market accounts are regulated by the Federal Reserve Board’s Regulation D, which governs deposit accounts and their reserve requirements. The reserve percentage is the amount mandated by federal law that banks must retain in house and not loan out to customers. For savings and money market deposit accounts, Regulation D limits the number of electronic ACH transfers that one can make to 6 per statement cycle, which is about a month. While the regulation doesn’t impose a reserve requirement for savings and money market accounts, it does impose about a 10% reserve requirement for checking accounts. Because checking accounts are utilized more frequently, the reserve requirement is to ensure that banks can meet demand and not run out of money. Because savings accounts are not subject to the reserve, the transaction limit helps to keep deposit withdrawals to a minimum.

In the past, before the popularity of online banks such as Emigrant Direct and ING Direct, this was less of a problem since bank customers usually visited their local brick and mortar branch to request bank transfers. Now, with the growing popularity of online banks and the emergence of interest rate chasers, customers are starting to hit or exceed their ACH limit with greater regularity. Every bank enforces Regulation D requirements differently. One time violations of the monthly limit will usually result in finance charges or refusals to process the excess request, but frequent violations may cause your bank savings account to be closed and terminated, with the balance transferred to your checking account or sent to you in the form of a check.


Transactions That Count Towards the 6 ACH Transaction Limit Include:

Online transfers from savings to a linked account (such as checking)

Outgoing online transfers made to another bank through ACH or via online wire transfers

Transfers made via phone banking

Pre-authorized deductions by a third party

Checks written from a money market account

However, Transactions That DO NOT Affect Your Limit Include:

Transfers and deposits into a savings or money market account

Withdrawals and transfers made at an ATM machine

Withdrawals and transfers made in a bank branch via a teller

A Few Possible Solutions To Get Around The Limit

Because banks don’t usually track and display your remaining limit for you on their websites, other than manually doing it yourself, another solution is to forgo the FDIC insurance benefits of savings accounts altogether and deposit your savings into a money market fund through a brokerage firm instead. There are usually no caps on the number of transactions you can make with money market funds, although some funds do impose minimum limits on the amount you can withdrawal at one time, as well as waiting periods for withdrawals. While money market funds are more akin to stock investments and theoretically involve a bit more risk, the interest yields are usually much higher than that offered by ordinary savings accounts. But if you want complete flexibility and liquid access to your money, perhaps you should just stick with plain old checking accounts. There are no restrictions with checking accounts, although the interest yields are usually low to none.

Source: Money Blue Book

NYC National Debt Clock runs out of digits

The National Debt Clock is shown near Times Square in New York, Wednesday, Oct. 8, 2008.

As a short-term fix, the digital dollar sign on the billboard-style clock near Times Square has been switched to a figure -- the "1" in $10 trillion. It's marking the federal government's current debt at about $10.2 trillion.

The Durst Organization says it plans to update the sign next year by adding two digits. That will make it capable of tracking debt up to a quadrillion dollars.

The late Manhattan real estate developer Seymour Durst put the sign up in 1989 to call attention to what was then a $2.7 trillion debt

Modern Money Mechanics

Did you ever wonder why there are economy corrections from time to time?

Why does ammount of US debt is only growing in size?

This is good movie to show why US economy is collapsing even when it's not obvious. Only 3% of the money is physical and 97% is fictional created as a debt. As long a Federal Reserve Bank is present people will be in debt. More money will mean more debt. And it will always be there! :)




The Modern Money Mechanics which is mentioned in the video can be downloaded from here or read from here

Where Does Money Really Come From?

Given current events, it might be good idea for the average citizen to better understand our modern banking system. Reader Rick submitted this following video by Paul Grignon which tries to explains things in an accessible way using animation. It is about 45 minutes long, so you need to commit a chunk of time to watch it, but I thought it was worth it.

The first part explains our fractional-reserve banking system very well. One might think that for every $1 we put in a bank account, that is $1 that can be lent as a mortgage loan. In actuality, it is more like $100 that can be lent. (Wonder why banks want our money so bad?) So where is most of the world’s money coming from? In effect, it is created by the act of borrowing itself. Money is created by debt!

However, in the end, it draws some controversial conclusions. The creator contends that this system is unsustainable, and because banks control the credit in our society, they effectively control the society. Thus, it would be better if the government took over such transactions. I have been unable to find a good rebuttal by a financial professional or economist online, so please drop a comment if you have.