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Regulation D Limitations - How does it affect your deposit accounts?

What is Regulation D, or Reg D?

Federal regulations require Financial Institutions to closely monitor withdrawals made from a Savings or Money Market deposit account. As non-transactional accounts, Savings and Money Markets must adhere to the Federal Reserve Bank’s Regulation D, which stipulates that no more than a total of six (6) transfers or preauthorized withdrawals may be made from each account to another account or to a third party in any month.

The following chart identifies which types of transactions are included in the transaction limitations and which are unlimited:

Transactions Limited to a total of Six Transfers Per Month Unlimited Transactions
Automatic transfers to other accounts Non-transactional account to Loan transfers
Preauthorized payments to a third party (ACH withdrawals) Deposits
Transfers from non-transactional accounts (except to loans) Transfers performed at an ATM
Transfers done over the phone either automated or speaking to a Financial Service Representative, including wire transfers Transfers in person at a teller window
Overdraft Transfers from non-transactional accounts Withdrawals made in person, by mail, or by messenger at a SFPCU branch
Online Banking Transfers from non-transactional accounts (except to loans) ATM cash withdrawals and transfers (subject to the daily amount limits and sufficient available funds)
Debit Card usage - Point of Service (POS) transactions

What is a non-transactional account?

At SFPCU non-transactional accounts include: Share Savings, Split-Rate, Holiday and Money Market Wealth Builder accounts.

What happens if I reach the limit of 6?

The 7th transaction will be rejected. If you are using a Savings account for overdraft protection on your Share Draft Checking account, the transaction will be rejected, the check returned as NSF (non-sufficient funds) and you may be subject to the $20 NSF fee plus any fees charged by whomever the check was written to. Even if you have the funds available in your deposit account, once the transfer limit of 6 is reached, no more of the covered withdrawals can be made until the next month.

If you are eligible for SFPCU’s Courtesy Advance program instead of receiving an NSF, we will cover your additional checks up to the $500 limit. You will still incur the $25 Courtesy Advance OD fee for each check, but you will not incur any additional charges from the bank trying to collect payment for your check.

What can I do to ensure I do not exceed the limit?

  • Have all pre-authorized withdrawals (insurance, utilities, etc.) withdrawn from your Share Draft Checking account.
  • Keep sufficient funds in your Share Draft Checking account to cover your checks and withdrawals, so you don’t have to transfer as frequently.
  • Have your Direct Deposit initially deposited into your checking account instead of your savings account. Checking accounts are transactional accounts and do not have the same Reg D restrictions.

What happens to my account if I continually exceed the transaction limitations?

Regulation D requires that SFPCU take steps to prevent excessive transactions in non-transactional accounts. Excessive transactions are transfers or withdrawals in excess of the six transfer withdrawal limitations from your Savings and Money Market accounts. For members who continue to violate those limits after they have been contacted by the SFPCU, the Regulation requires that either the account be closed or that the funds be transferred to a transaction account that the depositor is eligible to maintain.

Why does SFPCU need to adhere to Reg D?

  • Regulation D applies to all financial institutions.
  • The Regulation was implemented by the Board of Governors of the Federal Reserve System, whose job is to ensure financial institutions maintain adequate reserves for the funds they have on deposit