Reg D Transfer Limitation Query

Answered by:

Question:

Reg D restricts the number of transactions allowed on Money Market and Savings accounts, but allows for unlimited transfers in person. What warrants an in person transfer? We know it includes over the counter transfers, ATM transfers and transfers delivered via courier. What about telephone transfers and online banking transfers? It doesn't seem logical that these would be excluded.

Answer:

A telephone transfer or a transfer originated via your online banking system or by fax, are not considered transfers made in person. There is an exclusion for a withdrawal by telephone, and by extension, one by online banking system or fax, that results in the bank mailing a check payable to the account owner. Otherwise, the transactions fall into the category limited to six per month.

The easiest way to separate what's limited from what's unlimited is to group together all the so-called "convenient" transfers and subjecting them to the monthly limits. Convenient transfers would be those that can be completed from the comfort of one's own home or office or on vacation (via online or telephone). The "less convenient" transfers would be those where one would have to go somewhere (ATM or bank office) to complete them, and the "exceptions" like the unique telephone/cashier's check scenario mentioned above.

First published on BankersOnline.com 10/26/09