Until April 2020, US banks could not allow you to withdraw money from your savings account any time you wanted. That was because the Federal Reserve had a rule called Regulation D, which limited the number of transfers from savings accounts to only six a month. This regulation was lifted in April 2020, allowing banks to remove and stop enforcing this limit on their clients. However, most banks and credit unions kept imposing these transfer restrictions to this day, over a year after the rule came to an end. Others decided to allow over six transfers from savings accounts but charge a fee if this is decided to be done. There are also other savings models that don’t operate under this regulation, such as crypto-based savings accounts. These were always able to offer unlimited withdrawals.
Savings accounts are often used over checking accounts to store money due to their better interest rates. However, for many, not being able to withdraw as many times as they want can be an issue. The end of Regulation D should be the best news for those that wish to have a more liquid savings account. Many banks and credit unions keep the six transfers per month limit or are charging fees if you pass this number. Other financial institutions, however, don’t impose any limit or fee on withdrawals whatsoever.
If you are looking for a savings account that gives you the freedom to withdraw whenever you wish to, this article might be helpful. You will also learn which are the best savings accounts without transfer limits and if this is the best option for you.
A savings account is a type of bank account where you can deposit the money you are not spending. You deposit funds into this bank account, the bank lends the funds, and you later get a portion of the interest rate. This form of account is a great way to save money for unforeseen costs, personal objectives, or both. While checking accounts are intended for day-to-day banking, such as paying bills, savings accounts are solely for the purpose of saving money in a safe and, if possible, profitable manner.
Most, if not all, banks offer some sort of savings account, and most of them are very similar. It works like this: you deposit your money at the account, banks lend this money, and later share the interest rate with you. There are many different types of savings accounts. The most well-known are the savings accounts offered by traditional banks. These tend to have lower interest rates, more fees and tend to limit more transfers. Then there are high-yielding, money market, and tailored savings accounts, which have many differences between them. Some have very low liquidity, while others barely restrict withdrawals. Then, finally, there are digital and crypto-based savings accounts. The latter is not susceptible to regulatory limitations on transfer and withdrawals, resulting in unlimited transfers even before Regulation D was lifted.
Regulation D was a rule imposed by the Federal Reserve. This regulation restricted account holders to a total of six convenient withdrawals and transfers per month from a savings deposit account. A savings deposit account includes both a savings account and a money market account.
Savings accounts allowed unrestricted withdrawals from ATMs and bank teller machines. But, simple withdrawals, such as checks or electronic transfers from a savings deposit account to another account, were restricted.
On April 24, 2020, the Fed lifted Regulation D to make it simpler for consumers to retrieve their money amid the economic effects of the coronavirus pandemic. The end of this restriction was also linked to the very high savings rate in the US, the highest since 1959. By allowing consumers to withdraw from savings accounts more often, more money could be circulating in the economy.
However, the Federal Reserve hasn’t made this change permanent yet, and it is not clear if it will be. It also hasn’t made it compulsory for banks to stop imposing the six transfers’ limit. By doing that, most banks still haven't made any changes in their limit of withdrawals. Regardless, if you are looking for unlimited withdrawals, many financial institutions lifted the restrictions.
It is important to highlight that every financial institution will have a maximum amount per period that you can transfer from your savings account. You won't find a savings account that doesn't impose any type of limitation. However, the most liquid ones offer maximum amounts that you will hardly pass in a normal circumstance, such as $1,000,000 per week, for example.
As explained, many banks, credit unions, and other financial institutions took advantage of the end of Regulation D to offer more liquid savings accounts. Some still charge fees after a certain number of transfers, while others have no withdrawal limits at all. In this list of the top savings accounts without a withdrawal limit, you will be able to see both of these cases. However, all of the options presented have higher liquidity than the once demanded six transfer' limit.
On its website, it still maintains a six-withdrawal restriction per month and a $10 fee for every transfer over the limit. However, due to the Regulation D adjustments, Ally is temporarily refunding these $10 fees and not imposing transaction limitations.
It changed its limit, but it still imposes one. Every monthly statement cycle, you can make up to nine withdrawals or transfers. There are no fees if you pass this limit because passing it is not allowed.
Withdrawals and transfers from its online savings account are not restricted to a maximum number per month. Citizen Access does have a limit amount that you can transfer online for a certain period ($250,000 per day and $1,000,000 per month). The good news is that you can transfer as much money as you wish to through their call center team.
Even though the website still mentions the six transfers per month limit for savings accounts, it also states that Discover Bank is currently not enforcing it. Thus, Discover does not have a current transfer or withdrawal limit, as well as no fees being charged on the excess of transfers. Similar to Ally, Discover Bank change seems to be only temporary.
It is not currently imposing any limit on transfers from its savings accounts. The bank explains on its website that the change is based on the lift of Regulation D. It is not clear, however, how temporary the measure is.
You may only make seven transfers or withdrawals per month from your Key Active Saver account. This includes online transfers from savings or money market accounts to another account, transfers made over the phone, automatic, preauthorized transfers, or recurring transfers like bill payments.
There are no transaction limitations with the US Bank, which changed its restrictions after the lift of Regulation D.
Due to the fact that Outlet is a crypto-based savings account, it is not susceptible to Regulation D. Thus, it does not have a limited number of transfers you can make per month. This makes Outlet a great alternative to traditional savings accounts in terms of liquidity. It is important to highlight that it does have two limit amounts that you can transfer per certain period of time, even though they are very high. At Outlet, you are limited to transferring $5,000 per week via ACH transfer and up to $100,000 per day via bank Wire transfers.
If you wish to be able to do regular withdrawals from your savings account, that is an option. The previous savings accounts are the top ones that give you that freedom. However, if you have a hard time saving, this might not be the best approach. You might not need a bank or credit union to limit your transfers but limiting yourself from withdrawing too often can be better to build up savings.
In other cases, restriction on these accounts may be preferable when saving money. Knowing that your withdrawals are limited may discourage some savers from withdrawing or transferring cash too regularly from their accounts. This could help them save money for when they really need it.
Ultimately, like everything related to finances, defining which approach is better will depend on the saver’s needs, goals, and financial profile. Some people will feel better knowing they can access their savings as much as they want. Others need the restrictions and fees to make themselves not spend their savings. In the end, the decision is yours.