Savings account withdrawal limits: What Regulation D means for your money

Savings accounts are a great place to park your money and watch it grow with the help of a high interest rate. While a rule from the Federal Reserve called Regulation D (Reg D) once limited monthly savings account withdrawals, the rule was relaxed in 2020 during the pandemic.

Still, even though they’re not required to, most banks enforce the rule anyway. That’s why using savings accounts as they’re intended is a good idea — for saving rather than frequent transactions. If you’re approaching six withdrawals in a month, you’ll want to know which transactions don’t count toward that limit.

What is Regulation D, and how does it affect your savings?

The Federal Reserve helps manage the nation’s monetary policy, including setting rules for financial institutions. The Fed designed Regulation D to ensure banks maintain enough cash by limiting certain withdrawals from savings and money market accounts to six times per month.

Why does this matter? The withdrawal limit encourages people to keep their money in the bank. This helps banks meet their reserve requirements — the amount of cash they must hold relative to customer deposits.

The economy was upended during the pandemic, causing the Federal Reserve to alter many of its rules and implement new ones. In April 2020, the Federal Reserve temporarily suspended Regulation D‘s six-per-month transaction limit. This change is still in effect, meaning banks aren’t required to restrict savings account transactions.

“During the COVID, this rule was lifted to provide greater flexibility during challenging times, and many banks have chosen to maintain this flexibility since then,” says Uziel Gomez, a certified financial planner. “However, the specifics can vary by institution.”

Understanding withdrawal limits

Not all transactions from money market and savings accounts count toward the six-per-month limit.

Transactions that may be limited

Under Reg D, banks usually limit the most “convenient” types of transfers. These are generally electronic transactions that you can complete from home or through automated systems:

• Automated payments, such as bill payments
• Transfers made by phone
• Online transfers
• Withdrawals by check or money order
• Debit card transactions
• Overdraft transfers

Transactions that aren't typically limited

Some withdrawal types don’t count toward Reg D’s six-per-month rule, though your bank may have its own policies. These usually require more effort or direct interaction:

• ATM withdrawals
• In-person withdrawals at a bank
• Withdrawals made by mail
• Withdrawals made by phone but sent as a check

How banks handle withdrawal limits today

While the Fed’s relaxation of Reg D continues, it’s not permanent. It was implemented as an “interim final rule,” allowing them to quickly change policies. They can later finalize the rule, but the Federal Reserve hasn’t done so yet.

Many banks still enforce the six-per-month limit voluntarily. You might face fees for every additional transfer if you exceed this limit. Some banks may even convert your savings account to a checking account, causing you to lose any high APY you might be earning.

Here are some examples of top banks’ current policies.

Some banks have additional policies worth noting. For example, some may waive excess withdrawal fees if you maintain a minimum balance or have a premium account relationship. Others might send warnings before converting your account type. It’s always worth checking your account agreement or speaking with your bank to understand these details.

How to avoid hitting withdrawal limits

If your account imposes withdrawal limits, some strategic planning can help you avoid fees. The key is maintaining both checking and savings accounts with the right strategy for each.

Think of it this way: your checking account should handle regular money movement, while your savings account should primarily collect deposits. Keep enough in your checking account to cover your regular transactions, like bills and credit card payments.

“In general, a savings account is best used for storing money for specific goals or as an emergency fund, while a checking account is better suited for everyday transactions,” says Gomez. “A rule of thumb is to keep enough money in your checking account to cover 1-2 months of expenses. This way, along with your direct deposits, you can avoid dipping into your savings for everyday costs.”

Here’s a practical example: Say your paychecks arrive in your savings account on the 15th and the 1st of every month. Instead of paying your bills directly from savings — rent, credit cards, car payments, insurance, and student loans — follow these steps:

1. Calculate your total monthly expenses
2. Add a buffer amount for unexpected costs (perhaps 10-15%)
3. Set up one automatic transfer from savings to checking to cover the total
4. Schedule this transfer to occur shortly after your first paycheck of the month
5. Pay all bills from your checking account

This approach uses just one of your six monthly transactions while ensuring you’ve paid all your bills. Plus, you'll still have flexibility for unexpected expenses or additional transfers if needed.

Frequently asked questions

The bottom line

The Fed designed Reg D to help banks maintain cash reserves by limiting certain withdrawals from savings and money market accounts to six per month.

A pandemic-era amendment to Reg D deleted the six-per-month transaction limit, which is still in place today. In effect, banks do not have to impose withdrawal limits on savings account transactions, but many choose to do it anyway.

To avoid fees or account conversions, consider making one monthly transfer from savings to checking to cover expenses. If you need additional withdrawals, using ATMs or visiting bank branches usually won’t count toward your limit.

Remember that while some banks have relaxed their policies, others maintain these limits. Understanding your bank’s rules and planning your transfers can help you avoid unnecessary fees. The key is finding the balance between having access to your money and letting your savings grow undisturbed.