Free Banking Tips

Do you have a savings account? If you do, then it means you should know the meaning of Bank Regulation D. 

Regulation D is a law governed by Federal Reserve that limits each savings account only up to 6 pre- authorized debit transactions in a full statement cycle or a whole month period. The main reason for this is to implement monetary policy on how each banking institution should classify each depository accounts for reserve requirement purposes. There are different types of deposit accounts, and the most common types are the Savings and Checking Account. Savings account is mainly for savings purposes while checking account is for spending. 

To avoid penalties in a savings account which may cost between $12 to fifteen dollars per transaction, these are some transaction that we have to limit in a full month period or 1 statement cycle.

The only two debit transaction that can be done in a savings account without limits are the following:

• ATM Transfer
• Branch Electronic or counter withdrawal

Banker's Tip: Open a separate checking account and consider it a savings account. Just make sure you check with your bank what fees may apply to keep a checking account and see if you can meet the requirement. This way, you no longer have to worry about the 6 pre- authorized transaction. These works well, specially if you want to secure your funds and don't want to put all your money in just one account. But if you want to keep your savings account, then you can also keep a register of all your expenses per week and do a lump some funds transfer for your budget to avoid regular funds transfer out of the savings account. Do not forget that most banks offers unlimited ATM transfer out of the savings and even unlimited withdrawal from the branch. Wells Fargo, has an automatic set-up that reminds customers if they are about to go over the limit specially if you have online banking.

What happened to the checks that I deposited? When will this check become available? Where did the check go? why does my bank hold me check for so long? This has been our usual question whenever our checks are held by our bank.

Every check that is deposited or cashed in the bank are all verified by the Federal Reserve Bank and every bank has abide with this to protect the customers and also the bank itself. This is the reason why checks are held. Though, banks are making all the effort to avoid putting holds on the checks that are deposited, there still some instances where checks are held. Increasing of overdrafts in the account, history of previously returned items, reports that shows to have potentials that check can be return or even how long the account has been open can affects the decision on how long the check has to be held. In some instances, banks also hold checks to test for fraud or insufficient funds on the part of the check writer.

In U.S there are also checks that are checks that are no longer subject for hold. Checks issued by the government and commonly by Social Security -retirement benefits or child support and IRS- for tax refund. Most banks also allow customers to have a portion of the check deposited available depending on how the check was deposited. Example, since the bank encourage customers to take advantage of the ATM deposit service, they put an initial credit of $100 or a certain dollar amount when check is deposited before a certain cut- off time.

Each bank may have different procedures or rules when it comes to check availability so it is important that we understand our banks' specific policies regarding checks that are being held.