WASHINGTON (CN) – The Federal Reserve Bank is changing the definition of “convenient” transfers and withdrawals savings account holders may make in a month to allow six transfers or withdrawals made by check, debit card or other payable to third party orders.
Previously, savings account holders could make six total transfers from a savings account per month, only three of which could be payable to a third party. If account holders went over the sublimit of three payable to third party transfers or six total transfers, banks were authorized to convert the account to a low or no interest paying deposit account.
The Federal Reserve determined that payable to third party transfers have been made indistinguishable, in terms of cost to banks, by technological developments in that banking industry that allow all transfers to be performed electronically.
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