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This came up when I googled "banker" so I'm rolling with it
Then she said it was a "federal regulation."
I thought, "Baloney. It's your bank screwing you around."
But, lo and behold, there is a federal regulation that limits the transfers (what is defined as a "transfer" is kind of complicated) to six per month. (It looks like a bank can make the number less and create its own fees for violations, but the reg is silent about that.)
I had no idea.
19 comments:
The rationale for the rule is simple, Barry. Transfers require administrative work on the account by bank employees. In the structure of accounts:
(1) Certificates of Deposit (CDs) pay the highest interest rate, because NO "transfers" are allowed prior to maturity of the CD. If you need the money and have to cash it in early, you pay a penalty.
(2) Savings accounts pay the next highest interest rate. You get a few transfers at no penalty, but if you go crazy with them, there is a penalty.
(3) Money Market accounts pay the next highest interest rate, and you get to make even more transfers before the penalty kicks in.
(4) If you want to use an account to make lots of transfers, you get a checking account, and the number of transfers you can make is unlimited ... but you don't get much (if any) interest.
From the bank's point of view, you are simply paying for the privilege of being able to make a lot of transfers by taking less interest on the account. If you are willing to put your money into an account where you will largely leave it alone so they don't have to spend a lot of time "posting" your account current, they reward you for that by paying higher interest.
It's not a big conspiracy. It just makes sense.
It appears to be a Federal Reserve regulation - which is independent of the Federal Government. They are the same people that apparently have unionized computers because they don't work weekends or holidays. That's why when you make an online payment from your checking account to your credit card company it could take 5 days to get there.
I think the use of the word "higher" when dealing with interest rates is a little misleading. When CDs only return about 1%, I don't see how you can say that is higher than other rates. Unless you are a banker charging 15% on money you loan out.
my attempt at a mzchief-type post:
It's not really a SAVINGS account if your transfering money OUT more than SIX times per MONTH
It's a saving account!! The point is to save money!
If you need to transfer money out more then 6 times per year then you need a checking account or just stop spending!
You should of told that young gal that and then smacked her in the back of the head for being an idiot.
It's called an Excess Activity Fee, and it's authorized (required) under the Federal Reserve's Regulation D. It has to do with how much in reserve funds the bank has to keep.
Here's what Wells Fargo says on their website about it. From what I understand, cash withdrawals from an ATM are exempt from the transfer rule.
It really pisses me off that Wells Fargo charges you a cash deposit fee. You get charged for depositing cash! The only bank that has ever did that to me.
It's six per MONTH... not six per year.
You are a piece of work my friend!! For a guy who served as a Director of a bank you seem to have very little knowledge of banking and the industry in general. BTW, banks are not out to get the customer with all of these silly rules but are in fact trying to follow all of the bullshit regulations your liberal friends in D.C. keep jamming down the banking industry's throat!!! Mark my words, it will get crazier as a result of this Dodd-Frank crap!!!! You're an intelligent guy Barry, but way off base on much of the world around you!!!
Hey, it's a savings account!! Taking money OUT runs counter to the reason those accounts were created in the first place. Why not stop whining and open up a checking account?? Total goofball!!!
2:08, you show me a bank that's charging 15% to make a loan, and I'll show you a bank that isn't making any loans. If you have any kind of decent credit at all these days you can get a loan at 6 - 7%, tops.
To 2:08,
Last time I checked 1% is higher than 0.25%, so how is "higher" misleading.
And if you are being charged 15% on your loan, it is probably because your credit is horrible.
The reason for this rule is that the Federal Reserve tries to have an accurate figure for the supply of money. M1 is cash and checking, M2 includes savings (and some other things). Each of these measures has a different level of liquidity and therefore needs to be measured separately. I teach economics and used to work in a bank and I can tell you there are people who use their savings account like some of us use our checking accounts. When people do this it means that some of M2 effectively has the liquidity of M1. That could be a problem for those trying to stabilize, or change the money supply and indirectly the interest rates. Basic High School economics. No conspiracy.
She should complain to the person in her mirror that doesn't know the difference between a savings account and a checking account.
I just closed my citibank account because everytime I needed to talk to someone they would patch me thru to India! I do not support outsourcing of American jobs!!! I am now a proud member of DATCU. If more people refused to do business with companies that outsource american jobs then maybe they would keep these jobs where they belong! I made darn good and sure that they knew why I was leaving!
10:16, DATCU, you'll be interested to know, also outsources work to firms using offshore services.
Does anyone know why Wells Fargo charges a cash fee for depositing cash into your business account from your daily business? I have never had a bank do that...
Wells Fargo sucks as a bank!
Legend Bank has a free checking account that pays 4% interest on balances up to $25,000. It's free money on a checking account, because all you have to do is 12 debit purchases, 1 electronic deposit, and receive you statement online each month. Most of us are already doing that.
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