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On April 24, 2020, the Federal Reserve (Fed) issued an interim final rule dropping the six-per-month transaction limitation for savings deposits (accounts) in Regulation D. Prior to the rule change, Regulation D limited the number of certain convenient transfers or withdrawals an account holder could make from a savings account to no more than six per month. The prior rule also required financial institutions to either prevent transfers in excess of six or monitor the accounts ex post for violations. On March 26, 2020, the Fed announced reserve requirements were reduced to 0%. As a result of eliminating reserve requirements for transaction accounts, there is no longer a need to treat transaction accounts and savings accounts differently in Regulation D. The 18-page interim rule, effective immediately, deletes the six-transfer limitation from the definition of “savings deposit”.
The interim final rule also contained “frequently asked questions” (FAQs). The FAQs state financial institutions do not have to suspend enforcement of the six-transaction limitation. It also states the interim final rule does not require financial institutions to change the name of any accounts or products that have the name “savings” in them and may continue to report accounts as “savings deposits” on their FR 2900 deposit reports.
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