Business & Finance Personal Finance

Savings Bank Account Rules

By Business & Finance Last updated Sunday, June/02/2024

The federal goverment sets rules and regulations that financiers and banking institutions must follow.One Dollar - variations of Crumpled dollar image by PaulPaladin from Fotolia.com

Savings accounts are maintained by financial institutions and allow customers to set aside a portion of their liquid assets while earning interest. Savings accounts are regulated by the federal government under Regulation D, 12 CFR 204.2, which mandates banks and financiers follow strict guidelines when opening and operating a savings account. When you open a savings account, your financial institution will provide you with information that describes the federal regulations and the financial institution's policies.

Withdrawal and Transfer Frequency

Federal law mandates that a savings account holder can make up to six withdrawals or transfers per four weeks or per statement period. Each financial institution can allow three of the withdrawals to be in the form of check, draft or debit card. There are no federal regulations regarding the number of deposits that can be made, though each bank may make its own policies regarding deposit amounts.

Account holders are required to make a deposit when opening a savings account. A bank sets the minimum opening deposit amount, which can range from $50 to $300. Some banks require account holders to keep a balance of more than $300 in order to be exempt from service charges.

Savings account holders who do not follow federal regulations may be penalized with fees and charges. Exceeding the number of withdrawals and transfers, for example, may incur a penalty. If an account holder continues exceeding the number of withdrawals and transfers, the account can be downgraded to a checking account. Fees and charges are typically set by the financial institution.

Savings account interest rates increased on average from 1.6 percent in 2008 to 2.4 percent in 2009. Interest rates can fluctuate on a daily basis, so when opening a savings account, searching for the best interest rate is in your best interest. Most banks compound an account on a daily basis and pay interest each financial quarter.

Before opening a savings account banks require their customers to prove their identity by providing them copies of their identification. Social Security numbers and a drivers license or photo identification cards must be presented to the bank to determine if eligibility requirements are met. Eligibility requirements include proof of citizenship or permanent residency along with a tax identification number.