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Regulation D

Regulation D & its effect on Money Market Deposit Accounts (MMDAs) and Savings Accounts:

Money Market Deposit Accounts (MMDAs) and Savings Accounts fall into the category commonly referred to as non-transaction accounts. Non-transaction means there are limits to the number of transactions on the account. 

Regulation D, among other things, sets out the rules for non-transaction accounts (both consumer and non-consumer). These non-transaction accounts have specific transactions that are considered unlimited and specific transactions that are considered limited. 

Unlimited Transactions:

  • Transfers for the purpose of repaying loans (the MMDA or Savings is automatically debited to pay the payment on a loan of the depositor) 
  • Associated expenses at bank (maintenance fee, excessive withdrawal fee, check order charges, dormant account charges, wire transfer fees, etc.) 
  • Withdrawals, made by telephone, that are mailed to the depositor in the form of a check
  • Transfers or withdrawals made by mail (depositor sends bank a letter requesting a check be mailed or requesting a transfer to another account of the depositor)
  • Transfers or withdrawals by messenger (The Federal Reserve has stated that messenger service must be arranged for, contracted with, paid for, and under the control of, the depositor in order for the messenger exception to work.)
  • Transfers or withdrawals made at an automated teller machine (ATM)
  • Transfers or withdrawals made in person (the account owner physically appears before an employee of the bank to make a transfer or withdrawal)

Limited Transactions:

No more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle (monthly, quarterly, etc.) to or by:

  • Another account of the depositor at the bank
  • A third party by preauthorized (ACH for insurance, health club, utility, etc.) or automatic transfer (arrangement by bank to pay a third party from the account of the depositor at a predetermined time or on a fixed schedule - bill pay)
  • Telephonic or data transmission agreement (bank's automated telephone system, bank's bill pay on the internet, etc.)
  • Order or instruction (the depositor provides payment instructions directly to the service provider for processing on behalf of the depositor, and the service provider carries out those instructions as the depositor's agent - rare, usually used by non-consumer customers)
  • Check (an actual paper check)
  • Draft (an actual paper draft, i.e. insurance draft)
  • Debit card
  • Any similar order made by the depositor and payable to third parties