Common financial wisdom holds that everyone should have an emergency savings fund with at least a few months of expenses to live off of in case you lose your job or have a health emergency. But what happens when the emergency hits and you need to take money out of savings? In April 2020, partly in response to the growing Coronavirus pandemic, the Federal Reserve modified its Regulation D, which restricted “convenience withdrawals or transfers” from bank savings accounts and money market accounts to six per month. Prior to the change most banks charged customers who exceeded the six withdrawal/transfer limit or closed impacted accounts to comply with the regulations. In this article, we will explain what you need to know about this change and what it means for your First Exchange Bank “In Real Life Accounts.”
Why were limits placed on savings withdrawals?
The Federal Reserve (Fed) established a limit on savings account withdrawals per month during the Great Depression as a means to boost bank stability.
How does this change impact my First Exchange Bank Savings Account?
Prior to the current modification most banks would simply charge customers a fee for exceeding the withdrawal limits from savings accounts and money market accounts. The change does not prohibit the charging of fees, it simply allows charging of fees as an OPTION for those who exceed withdrawal limits on savings and money market accounts.
First Exchange Bank is pleased to announce that we will NOT charge for excess convenience withdrawals from savings and money market accounts.
One less item you need to worry about as you manage your First Exchange Bank deposit accounts. We call this Banking In Real Life.
What types of First Exchange Bank savings accounts are impacted?
The Fed defines a “savings deposit” account generally as a passbook/statement savings account, or a money market deposit account. Here’s what you need to know about each of these types of savings accounts:
Statement Savings Account
As the name suggests, statement savings is a type of savings deposit account that comes with a periodic statement of activity showing your beginning balance, any transactions, interest earned, and ending balance. These accounts may also have features such as online and mobile banking and more. With our changes you will be able to make online or over the counter transfers to or from your statement savings account without worrying about transaction limits.
First Exchange Bank offers personal statement savings accounts as well as minor statement savings for the children and teens in your life and business savings accounts to meet your business needs.
Money Market Deposit Account
A First Exchange Bank money market account offers a higher rate of return than statement savings, without the commitment of a Certificate of Deposit (CD). With our changes you will be able to make online or over the counter transfers to or from your money market deposit account as well as payments to third parties without worrying about transaction limits.
First Exchange Bank offers both a personal money market account and a business money market account to meet your business needs.
How will the Regulation D change impact my First Exchange account?
First Exchange Bank will follow the Fed’s guidance to permit more than six transfers or withdrawals per month WITHOUT a fee or a penalty. If you have additional questions, check out the Federal Reserve’s “Savings Deposits Frequently Asked Questions” or contact us to speak with a bank representative.
Open a savings deposit account with First Exchange Bank!
With more freedom, flexibility, and convenience than ever before, now is the time to open a new savings deposit account with First Exchange Bank. Choose from a range of options to fit your needs and goals: Money Market, Statement Savings, and more! Open a savings account today to earn interest without sacrificing access to your cash. Visit one of our North Central West Virginia locations in White Hall, Mannington, Fairmont, Morgantown, Hundred, or Fairview to open an account today!
