Federally Regulated Savings Withdrawals and Transfer Limits
Federal regulations, specifically Regulation D, shortened to “Reg D,” places specific limits on the number of certain withdrawals and transfers that a financial institution may allow a member to make from a share account. Reg D allows a member to make up to six (6) preauthorized, automatic, telephonic or audio response transfers to another account of your own, or to a third party during a single calendar month. Of these six (6) transactions, you are only allowed to make three (3) transfers to a third party via a preauthorized EFT/ACH, a check or a debit card withdrawal from your share account. Examples of transfers to a third party include an ACH debit (withdrawal) for your monthly AOL internet access, a NETBRANCH transfer from shares to checking, share overdraft transfers from shares to checking to cover NSF checks, or a faxed or telephone request for a transfer from shares. Please note – many members have their payroll deduction deposited in shares, and then transfer funds to the checking on an “as-needed” basis. After three such transfers, Reg D fees will be assessed with the fourth transfer attempt, and the system will not allow you to make the transfer. Transactions that exceed the regulatory restrictions will be returned unpaid, and the account will be assessed a non-sufficient funds fee of $25.00. You may make unlimited withdrawals in person, with your ATM card (NOT VISA Debit card), by mail or by night drop transactions.
This will also affect your share draft account, if you are counting on the funds to be transferred by share overdraft transfer. After a total of six (6) Reg D defined transactions, that share overdraft transfer is NOT going to occur. At that point, if you have Courtesy Pay on your draft account, the item will be paid through that program, and you will be assessed a Courtesy Pay fee of $25.00, even though you may have had sufficient funds in your share account to cover the transaction. If you do not have Courtesy Pay on your draft account, the item will be returned as non-sufficient funds, and you will be assessed an NSF fee of $25.00.
How can you avoid these Reg D limitations?
Set up all ACH debits/withdrawals to come out of your checking account. Your checking account is a DEMAND deposit account, so has no limitations on the number of withdrawals or transfers that can be made out of it. (Except for the $ balance!)
When making transfers from shares to checking through FlexTeller or by PAT (Phone Anytime Teller), make one large transfer instead of several small ones.
Maintain a check register, and balance your checking account often. This will help limit the number of share overdraft transfers from shares to checking to cover checks.
Plan ahead! Stop by the credit union or mail in your funds transfer requests. And you may make withdrawals in person, by mail or at an ATM.