Banks Were Allowed to Give People More Access to Savings in the Pandemic

But the rule change by the Federal Reserve Board didn’t require banks to drop their limits, and some haven’t.

By Ann Carrns

A year ago, as the economy shut down during the pandemic and millions lost their jobs, the Federal Reserve Board changed a banking rule to give people easier access to the money in their savings accounts.

The board allowed banks and credit unions to offer customers unlimited withdrawals or payments from savings accounts each month. The change also applied to money market accounts — hybrid accounts that typically pay slightly higher interest rates and come with an A.T.M. card and limited checking privileges.

The change, the board said, would allow consumers to get their money more easily, “at a time when financial events associated with the coronavirus pandemic have made such access more urgent.”

Before the pandemic, a federal banking rule capped at six the number of withdrawals or transfers that customers could make monthly. When customers exceeded that limit, banks often charged a fee — $5, $15 or more. Banks sometimes warned customers that they would close the account or convert it to a checking account, which often pays little or no interest, if customers repeatedly exceeded the cap.

The rule change, however, didn’t require banks to drop the limits. Some banks temporarily suspended their caps and accompanying fees, allowing customers unfettered use of their savings. But others kept both limits and fees in place, and continue doing so, even though the rule change appears to be permanent or at least long term, said Ken Tumin, the founder and editor of DepositAccounts.com, which has tracked banks’ policies.

According to its response to frequently asked questions on its website, the Federal Reserve “does not have plans to reimpose transfer limits” but may make “adjustments” to the definition of a savings account “if conditions warrant.”

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