Fed Ends Limits on Withdrawals and Transfers From Savings Accounts
The new interim final rule gives depositors greater access to funds they may urgently need now.
In its continuing effort to support households experiencing financial difficulties during the COVID-19 pandemic, the Federal Reserve announced that banks can now let customers take an unlimited number of transfers and withdrawals from their savings accounts.
Depository institutions are no longer required to limit transfers and withdrawals to six per month, but they are not obligated to suspend enforcement of the previous limit, according to the Fed.
Its interim final rule, which amends its Regulation D, takes effect immediately because “financial events associated with the coronavirus pandemic have made such access more urgent,” according to the Fed.
The central bank explained that the six-per-month limit on transfers and withdrawals was unnecessary because the Fed had already eliminated reserve requirements for bank accounts as part of a broader policy change in late March “to support the flow of credit to businesses and households.”
On March 15, the same day the Fed slashed interest rates to zero, it announced it was reducing the reserve requirement for depository institutions to to zero, effective March 26, 2020, to help “support lending to households and businesses.”
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