The money in your bank account belongs to you, which means you get to decide when and how you plan to use it. However, your cash isn't always as readily accessible as you might like it to be. Withdrawals from bank accounts are limited by a variety of factors that include federal regulations and the size of the bank's cash reserves.
Regulation D, a federal regulation, limits the amount of money you can withdraw from a savings or money market account. Withdrawals involving online banking, telephone banking, overdraft protection and pre-authorized transfers are limited to six per month. If you exceed the monthly withdrawal limit on three occasions, your bank may close your account or convert it to a non-interest-bearing account. Other types of withdrawals, such as those involving ATMs or in-branch/teller withdrawals, are unlimited. Regulation D doesn't apply to checking accounts, which are technically known as demand deposit accounts because you can demand access to your funds at any time.
Certificates of Deposit
When you buy a certificate of deposit (CD), you agree to keep your money in the account for a certain period of time. You earn interest on the CD, and you can withdraw your principal and interest when the CD matures. Normally, you incur penalty fees if you withdraw CD cash before the account reaches maturity. The penalty fees may reduce both your interest earnings and your principal. Some banks offer so-called no-risk CDs from which you can withdraw money at any time without paying penalty fees. However, no-risk CDs usually pay lower interest rates than standard CDs.
Minimum Balance Requirements
Withdrawals from checking accounts are unlimited, but in some instances, pulling your money out of the bank may end up costing you. Some banks impose minimum balance requirements on checking and savings accounts. You pay a monthly service fee whenever your balance falls below a certain amount. Aside from paying fees, savings accounts often have tiered interest rates, which means you earn less money when your balance falls below the required minimum. Some banks waive the balance requirements if you sign up for other services such as direct deposit or online banking. This means you can get your money when you need it without paying any fees.
Banks and credit unions normally keep just enough cash on hand to cover the anticipated needs of their customers. Excess funds are stored in remote vault locations or at the Federal Reserve bank. A banking center may run out of cash if large numbers of clients make big withdrawals within a short time frame. Consequently, some banks limit the amount of cash that you can withdraw on a single day. Banks can require you to provide seven days' advance notice when you plan to make a withdrawal from a savings account.
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