The Reserve Requirements for Depository Institutions ( 12 CFR 204 , Rule D ) is a Federal Reserve regulation that specifies the reserve requirement for banks in the United States.
It also limits the number of withdrawals and pre-authorized transfers from savings accounts or money market accounts.
Video Regulation D (FRB)
Six-transaction limit
In consumer banking, "Rule D" often refers to Ã,§204.2 (d) (2) of the rule, which places a sixth limit of withdrawal or outgoing transfer per month from savings or money market accounts through several transaction methods. Transactions calculated against limits include "pre-authorization or automatic transfers, or by phone (including data transmission), orders or instructions, or by checks, drafts, debit cards or similar orders made by depositors and paid to third parties." Transactions are not counted against limits including "letters, couriers or in person or when the withdrawal is made by telephone (via checks sent to depositors)."
The regulation was amended in 2009 to allow for greater freedom for depositors: previously, the limit was six withdrawals per month if funds remained within the same institution (eg, transfer to checks), but only three drafts in which the funds left the institution (eg , check, ACH, or card-based purchases).
The amount of deposit or transfer into savings or money market accounts is unlimited.
Rule D does not supersede the six-time transfer limit on outgoing savings or money market account transactions, by courier or mail; withdrawal and over-the-counter (OTC) transfers, ATM withdrawals and transfers, or installment loan payments.
Maps Regulation D (FRB)
Penalties for violation
Rule D "penalty" or fees vary by financial institution. Discover Bank, for example, will close a savings account if Rule D exceeds 3 or more times in a 12 month period. USAA will close the account if Rule D is exceeded more than 3 times in a 12 month period. From a legal point of view, notices exceeding 6 allowed transfers must be communicated to the account holder. Each financial institution will choose to charge (or not charge) to exceed these limits. Wells Fargo, will not close a savings account, but will charge $ 15 "Over Activity Fee" for each item removed after the rule has been exceeded. PNC Financial Services will convert a savings/money market account to a demand deposit account with no interest. Financial institutions are allowed to select their own cost schedule in accordance with this required federal regulation.
See also
- Savings Account
- Money market account
References
External links
- FRB 12 CFR 204 ("Rule D")
- Rule D of the Federal Reserve
- FDIC PART 204 - RESERVE REQUIREMENTS OF STORAGE INSTITUTIONS (REGULATION D)
Source of the article : Wikipedia
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