Many banking customers don’t even realize that they have to pay for excess withdrawals from their savings accounts until it’s time to pay up. At Bank of America, there is a $3 fee is charged to customers for making three or more savings account transactions. Far less generous than the six transactions most other U.S. banks allow on similar products, which is offered at no cost, find out why this strict withdrawal policy exists at Bank of America.
Withdrawal policy at Bank of America
If you put your money into a Bank of America (NYSE:BAC) savings account, chances are you’re more than familiar with the bank’s three-transaction limit. Under that policy, customers who make more than three transactions within a monthly cycle can incur a $3 fee on their savings accounts.
What’s interesting about the bank’s policy is that it is actually much more rigid than federal rules dictated by Regulation D, which limits the number of transactions customers can make with their savings or money market accounts without incurring a fee.
The maximum number of transactions Bank of America customers can make on their savings accounts will still be six, after which they will then have the option of converting their savings account to a checking account. A similar fee would be imposed on money market accounts. You can read more about the fees on Bank of America’s website.
Its explanation: the fee helps to deter its customers from excessively dipping into their accounts.
According to The Consumerist, Bank of America maintains its savings account policy to deter customers from hitting the federal limit. A writer for the blog accurately likened the new policy to giving someone a speeding ticket for going 27.5 mph to deter them from going 55.
A representative for the bank couldn’t immediately be reached for comment.
Tip: Transactions that do not lead to excess withdrawals include those made in person or through an ATM machine, a check, messenger, or at a branch. These transactions will not be counted towards the allowed six withdrawals for the month.
UPDATE: Don Vecchiarello Jr., a spokesman for Bank of America, told MyBankTracker that the fee, which as been around for over 15 years, is much smaller than the the typical $12-$15 fee charged by most major banks on the seventh withdrawal for a savings or money market account.
“We begin charging a smaller fee on the fourth withdrawal in order to remind customers to maintain their savings account balance and promote good savings behaviors” said Vecchiarello. “The fee is still $3.00 on the seventh withdrawal, so over time customers making seven or more withdrawals from one of these savings accounts would most likely pay less in fees at Bank of America.”
Vecchiarello added that the bank’s goal was to “encourage customers to maintain money in their accounts as a way of promoting and reinforcing savings behaviors.”
Have you already been hit with Bank of America’s savings account fee? Sound off in the comments section below or write a bank review to let us know how you feel about it.