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Also the limitation is not put in place by the FDIC, they do nothing but insure your money. The 6 withdrawal limitation is part of Regulation D from the Federal Reserve Board.
My bank slapped me with a $5 service charge because we made more than 6 withdrawls (ATM, debit card, and transfers to other accounts) in one month. They didn't threaten to close the account, just charged us for doing it.
This was even applied to transfers from my savings to checking accounts at the same bank, accessed from the same ATM/debit card and online banking ID & password.
It boggles the mind that one can't freely move money between two accounts in the same financial institution to maximize collecting interest on one's funds. I barely even use the savings account at that bank now; except for the delay in getting the funds, I'd rather use my credit union which offers a much better interest rate.
According to the ING Direct service rep, transfers from one savings account to another within the same login identity do count as withdrawals for this purpose. And to answer your question, the transfers were not between a joint account and an individual account.
Otherwise, I don't think I would have received the notice.
I'll have to give myself the heads up. Luckily, I'm trying to make my transfers one-way IN rather than OUT. :-)
- no more than 6 withdraws a quarter, for balances under $1,000. No limits when the balance is above $1,000.
This is why I have the kids with emergency balances of $1,000 minimum in their brick and mortar accounts. Less chance for trouble.
I read this before elsewhere....maybe I need to look into it farther. Is your ING Account maintaining a minimum of $1,000?
D, your bank apparently has their own restrictions in addition to Reg D. Also, ING accounts have no minimums. (Except CDs?)
If anyone has a few dozen hours to kill, here is Regulation D in all its glory: http://www.federalreserve.gov/regulations/#d
My big problem is not so much that they have the rule, but more with the fact that they do not easily have a way for us to find out how many we have used. They obviously know the number as they know when we are over it...it should be displayed in huge, bold numbers when we login to the bank site how many we have used so far in a month. Why is it such a big secret.
Also, everyone should get a high yield online checking account to handle their transactions. The online savings should not be used to make payments.
Banks and credit unions usually pay more interest on savings accounts, so I would rather keep my cash there than in a low- or non-interest-bearing checking account. With these withdrawal limits, I am not allowed to use my savings to routine business because that would create too many transactions. I have to keep a higher balance in the lowest interest checking account, even though I rarely write any checks. The banks profits go up.
The other strategy is to buy stock for the bank you do business at to dilute the fee dinging, no/low interest. If they're making a profit off you, at least take some of that profit back at the stock level.
1. Have a money market account instead of a savings account.
2. Use multiple savings accounts.
A money market account (assuming you are talking about a deposit account and not an investment account) is still considered to be a savings account and subject to the same limit of 6 withdrawals. The only difference with a MM is that of those 6 withdrawals, 3 of them can be checks.
I tried to do so recently and was told that "I do not qualify to open an account."
I personally think that a online savings account should be used supplemental to a checking account (hopefully one that pays interest).
Now that I have an ING Direct checking account, I should just make that the primary account I use for direct deposit at work, and then distribute from there appropriately.
At least they sent a really sweet letter and didn't charge a bunch of fees. I am very very afraid of fees.
Love your blog :)
On the issue of sub-accounts, I didn't know about them. I created a single savings account, and sub-divided it with a spreadsheet. Each line of the sheet is an account: trip, medical, emergency fund, and such. I can shuttle money between "accounts" as much as I like because it's all in the sheet, ING just sees the large blob of money that gets added to and occasionally subtracted from.
Buried in the details of the Electric Orange descriptives is an interesting tid-bit. It is hidden from the customer visually, but EO is actually a matched checking and savings account pair. At the beginning of the month, all money is transferred to the savings. For the first five withdrawals,the money jumps to the checking then pays out. On the sixth withdrawal, all remaining money is transferred from the savings to the checking and further withdrawals pay out of the checking directly. (Cripes, I actually remembered that!) I'm not sure why they do this.
I received an e-mail from ING yesterday at 4pm informing me that they had obtained my credit score from a consumer reporting agency and had decided to close my Electric Orange account and reduced my overdraft line of credit to $0.I was, however invited to re-apply after a 30 day wait. I called the customer service line to protest advising them that I had been a long term customer since 2003, had used my overdraft only three times and had paid it back promptly, even before the payment was due. I also reminded the representative that I had a regular deposit which was coming directly from my paycheck, all to no avail. They had made a decision and had no intention of reversing it, despite the fact that their major pitch in advertising the Electric Orange account was that they would not, in their own words, "Ding your credit with an inquiry". I also made nowhere near the six withdrawals from my savings that are mentioned here.
The representative placed me on hold to speak further with a manager, and left me there. I hung up and redialed as I decided to close all of my accounts with ING. I got another representative who explained that the institution had recently decided to exercise its right under the disclosure agreement and run credit checks across the board. I assume they decided that they had openened themselves up to a great deal of financial risk by giving everyone who opened an account an open ended $165 line of credit. I pity the individual who came up with that idea. In hindsight, I suppose I was naive in thinking that a bank as large and profitable as ING could be successful offering such an "unsecured" product. Needless to say, I have decided that this across the board decision, along with the 3-4 business day delay in moving money between linked accounts, and the additional delay in crediting "good" funds received from an electronic deposit, is a little more than I am willing to put up with as a good customer.
I have closed my ING accounts and transferred my money to an institution that treats its customers with a little more respect and courtesy than what they afforded me in this situation. I doubt that my little piece of business will make much of a dent in their profitable operation, but I feel an obligation to let everyone know about what I consider to be a dirty, underhanded trick.
I had the same thing happen to me. Got the email last week saying the account would close in 30 days and the overdraft was $0. Today I got an email from the COO, apologizing and reinstating the account and overdraft to the full $1000. I called customer no-service and they only knew that it happened to a wide number of people but had no real reason why or any explanation. I am hesitant to start using the account again though because when they close it like that, it locks the debit card, whether or not there is money there to cover the transaction.
Bill