I am reading a Reg E disclosure that also indicates the limits on transaction accounts under Reg D. The disclosure indicates the following for a savings account:

This section is for a telephone banking system.

Limits of Frequency of Transactions:

Money Market Accounts - The total number of telephone and pre-authorized electronic transers cannot exceed three (3) per month.

There is no limit to the number of transfers made from day-to-day savings and checking accounts

Tell me if I am wrong, but on a telephone transaction from a savings account not a Money Market, the transaction restrictions are (6) not unlimited. Correct or is there something I missed?

A telephonic transfer is subject to the 6-transaction limit.

As AndyZ likes to say, if it's convenient, it's covered.

You missed nothing, Tina. Savings accounts are subject to the same transaction limitations that apply to MMDAs. Actually, the limits are contained in the definition of Savings Account in Reg. D.

An MMDA is a savings account with checks that isn't a transaction account.

Well thank goodness . I thought I missed something. Thanks guys.

Tina - I don't disagree with the responses here - as savings accounts are included within the limited transaction regs, but what is a "day-to-day savings account?" Perhaps another name for a NOW account, not an actual savings account?

Ok, I am asking a few questions in regards to Reg D to clarify my understanding.

1. Does having Savings Overdraft Coverage on an account limit the number of times the transfer to the checking account can be completed (limit 6 per month) or is it considered as a "transfer to another account of the same depositor at the same institution"

2. If you use the telephone system to transfer funds between a savings and checking account, is it then considered a "transfer to another account of the same depositor at the same institution" thus becoming exempt from the transaction limitations?

Transfers to cover an overdraft are included in the six and telephone transfers are also included in the six.

Thats what I thought. What I am coming up against in a local institution that is stating in their disclosure that the telephone transfer from your savings to your checking are unlimited. So here I am trying to figure out how they can do that and pass an audit.

Tina - they can do that, if they classify the "savings account" as a transaction account when they report balance sheet volume to the FRB. According to FR2900 instructions, they can call it a savings account, but classify it as an ATS, NOW or telephone/preauthorized transfer account - in other words - a transaction account.

FR2900 specifically states that "Transfers initiated by telephone, fax and on-line banking" are included in the six transaction maximum. Of course, they can withdraw funds via telephone as long as the check is mailed to the depositor.

Ipso hit the nail on the head, I suspect. Ask if the account has limited ownership. A NOW and ATS will, if they are doing it correctly. We have a savings account that is actually the "from" account in OD protection. It is an ATS account.

Then again, I have heard there are some compliance folks who are not on BOL. They are disadvantaged and may not know better. Show them the way.

Of course, presuming they are paying interest, that also means that they have to limit the customers who open the account to the entities on the NOW account eligibility list.