Bank of AmericaQ: I recently was charged $3 by Bank of America for “Fee For Checks And/Or Withdrawals Over Limit.” I stash money in my savings accounts with the intention of savings, then often times run out of money before my monthly paycheck, and have to take from savings to cover bills in checking. Why should banks be allowed to penalize a customer for moving money between accounts? Why can’t the Federal Reserve let us move our money around the way we see fit, and force banks to comply with their six-a-month limit?

– Sharon

A: (To offer a little background on Sharon’s question: Bank of America customers with a savings account are subject to a $3 fee for each withdrawal after the third per month.)

For consumer banking, Regulation D places a monthly withdrawal limit of 6 per month on savings accounts.

The rule governs how much the banks must have on reserve in a particular type of account, while the rest can be lent out. For a savings account, the reserve requirement is 0% of the balance. For a checking account, which is likely to have more transaction activity, the reserve requirement is 10% of the balance.

Most banks will charge an “excess withdrawal fee” per withdrawal over the limit, while the first six withdrawals of the month are free. While this pricing model is the industry standard, some banks take different approaches.

Bank of America begins to charge a fee after the 3rd withdrawal as a warning to savings customers. SunTrust takes a similar approach by tacking on a $4 fee after the 2nd withdrawal per month on certain savings accounts.

From a consumer perspective, such fee policy does seem ridiculous when you are just moving your money around. But, there is no rule that says that banks cannot charge a withdrawal fee. Banks could charge for every single withdrawal if they wanted to do so. In fact, some prepaid cards will charge for each bank transfer and ATM withdrawal.

Excess withdrawal fees help discourage savings customers from shifting funds frequently so that banks can maximize the 0% reserve requirement on its lending operations. It’s also part of the reason that savings accounts pay interest on deposits.

Note that the limit applies to outbound electronic, online and phone-initiated transfers. If you want to avoid the excess withdrawal fee, you can withdraw money at the ATM or in person and deposit that money at another bank.

Or, since you’re finding that you frequently have to tap your savings, it would be a better idea to keep a larger balance in your checking account to act as a buffer. You would probably save more money in excess withdrawal fees than you’d earn in interest anyway.


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  • MJC60

    I just closed my BoA savings account because they or the Governmnet stole my $45. BoA nickle and dimed my for the past 7 years and I have had enough. It’s late Saturday, so I cannot close my Checking. But first thing Monday, I’m opening a Credit Union checking and savings and taking my $300 with me. I’ve had enough of big banks nickle and diming those of us who essentially pay for them to steal our money while the rich and BoA’s board get rich with no negative repercussions. They can afford to keep 5K or more in a savings account and “diversify” thier portfolios. Im a civil servant trying to save for my retirement which will never come. In November, I borrowed 8K from my Deferred Comp to pay off a Maryland state tax bill and some credit card bills. I Transferred the money into my BoA savings account from my checking to ensure I spent it on what it was meant for since I use bill pay for just about everything. With no knowledge of this ridiculous federal reseve rule, I moved the money between my checking and savings when it was time to pay the different bills. I did this on 7 different occasions as the bills were paid over a 2 or 3 week period. Not only did BoA charge me $10, but last night they charged me $45 dollars and then said all the money was going to the Federal Reserve. Who knows? Maybe BoA gets a cut of all the bucks they collect from people like myself. I’ve had enough. They charge my college student daughter, $9 a month to have an online account becuase there’s not BoA in Columbus, Oh! Its the only way to get her money without moneygram or wiring the money. They take more than they give and if the Federal Reserve is stealing from me to help banks stay afloat, this is the last bank I will use. Let them help me stay afloat!

    • Jeanna Storm


  • Mona

    Well Thank for your threatening statement (“Banks could charge for every single withdrawal if they wanted to do so. “) and thank you for your services I am going with Simple Bank anyone reading this post check Simple bank its the best !

  • Mario

    Great article!


  • Jeanna Storm

    AND I could find a new bank! BOA IS A WHORE!

  • RicanBabeNY68

    I have Chase/JP Morgan and just sent them a message about this same issue. They charge me $5 for each withdrawals after the 6th one per month. There is a reason I have savings, to SAVE. You don’t know what circumstances you will faced each month, so I need my money, key word, MY MONEY! I already have a credit union account and once I get back from vacation in August, I am going to switch my direct deposit and do all my banking with the CU. Screw Chase/JP Morgan and their FR BS!

    • Simon Zhen

      I think Chase is so bad (at least when compared to other banks) with its $5 excess withdrawal fee that kicks in after 6 per month. Other banks charged around $10 to $15.

      Is your direct deposit going into your savings account first, causing you have to make withdrawals regularly through that account?

      • RicanBabeNY68

        No, I have them split up, with only $100 going to sdavings every payckeck and the rest to checking, but of course, unexpected things happen and I have to transfer from savings to checking… ridiculous!