Understanding Regulation D: Rules & Guidelines
What is Regulation D?
To control the supply of money available in the U.S. and financial institutions’ reserve requirements, the Federal Reserve Board created Reg D and account classifications. This is a Federal Regulation that affects all financial institutions.
How does Regulation D apply to me?
Reg D regulates Savings Accounts, Holiday Club Accounts and Money Market Accounts. The basic rule states that a depositor may make no more than six (6) “covered” transfers or withdrawals from the account in a calendar month. There is no limit on “non-covered” transfers or withdrawals.
What are “covered” and “non-covered” transactions?
Covered (Counts towards the Reg D limit of 6)
- Preauthorized Transfer (either to another account or to KCCU)
- Automatic Transfer
- Online Transfer
- Telephone Transfer (either Audio Teller or Office)
- Check to a third party
- Draft to a third party
- Debit Card to a third party
- Similar order made to a third party
Non-Covered (Does not count towards the Reg D limit of 6)
- Transfers or loan payments at KCCU
- Transfers or withdrawals made to another of your own accounts or made payable to you if made by: Mail, Messenger, ATM, In Person
What happens if I reach the limit of six?
If you are using this account for overdraft protection on your checking account, the transaction will be rejected, the check returned NSF (non-sufficient funds) and you may be subject to the NSF fee plus any fees charged by whomever the check was written to. Even if you have the funds available in your deposit account, once the withdrawal limit of six (6) has been reached, no more of the covered withdrawals can be made until the following month.
What can I do if I need to take money from the account?
You are free to make withdrawals via any of the non-covered methods, however, automatic overdraft protection cannot occur.