A US banking question

The wife and I are buying rental properties and I ran into an issue at one of my banks last month.

I had no idea the federal government regulated the number of withdrawals or transfers out of a savings account. I've been warned that if I do it again, my savings account will be converted to a checking account.

How do you guys deal with needing to move around money? Having that kind of money is a relatively new thing for us, and we're a little baffled at it. But mostly, I'm pissed that the federal government is THAT GD involved in my banking. SARs and "know your customer" are bad enough. This is insane.

Yes, “Savings Accounts” are limited to the number of withdraws each month. Most will give you a warning and not convert them. However, if you are moving money around frequently you will need Demand Accounts (Checking). I suspect your account will not get converted.

The Commerce Clause lets the government regulate just about everything under the sun. You can thank FDR.

I guess I’ve never made enough transfers in a month, I didn’t know that either!
I once walked into a closing with a substantial pile of money, you would have thought I had set a fresh dog turd on the table rather than greenbacks! They did not want anything to do with that cash! I learned a lesson that day. Lol

wesheltonj said:

Yes, “Savings Accounts” are limited to the number of withdraws each month. Most will give you a warning and not convert them. However, if you are moving money around frequently you will need Demand Accounts (Checking). I suspect your account will not get converted.

The INSANELY ABUSED Commerce Clause lets the government regulate just about everything under the sun. You can thank FDR.

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There, fixed it for you.

sgt_zim said:

The wife and I are buying rental properties and I ran into an issue at one of my banks last month.

I had no idea the federal government regulated the number of withdrawals or transfers out of a savings account. I've been warned that if I do it again, my savings account will be converted to a checking account.

How do you guys deal with needing to move around money? Having that kind of money is a relatively new thing for us, and we're a little baffled at it. But mostly, I'm pissed that the federal government is THAT GD involved in my banking. SARs and "know your customer" are bad enough. This is insane.

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One thing you can do to avoid this is get a line of credit, either a personal secured or unsecured, or. HELOC. Since you have the money in hand, you just make all your transfers in a month against the loan, then put the money back in. The money will only “cost” you the number days it is out of the account, but there is no limit on the number of transfers. Not sure what kind of interest you are getting on savings account, but most banks now are just slightly lower(as in negligible) on an interest bearing checking account. Just my 2 cents(which is more than my savings account is paying) LOL.

Hadn't thought of using my LOC. Good idea. Thanks!

Bullthrower338 said:

I guess I’ve never made enough transfers in a month, I didn’t know that either!
I once walked into a closing with a substantial pile of money, you would have thought I had set a fresh dog turd on the table rather than greenbacks! They did not want anything to do with that cash! I learned a lesson that day. Lol

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Yep I did the same thing once... Sold a pickup and some toys for cash and tried to use the cash for a deposit on a rental property. The bank dude just about jumped out of his shorts. They were afraid that it was drug money or from some other ill gotten booty, and the government was going to come seize the house after closing....

Mekaniks said:

Yep I did the same thing once... Sold a pickup and some toys for cash and tried to use the cash for a deposit on a rental property. The bank dude just about jumped out of his shorts. They were afraid that it was drug money or from some other ill gotten booty, and the government was going to come seize the house after closing....

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Welcome to the war on drugs, where if you get even close to 10k cash, be prepared for a rectum exam.

wesheltonj said:

Welcome to the war on drugs, where if you get even close to 10k cash, be prepared for a rectum exam.

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I lived on the Rio Grande when I did it! I am quite sure that I have never been mistaken for a drug kingpin though.

Ask them if you can pay in Bitcoin...that wont cause any issues

Savings accounts are not suitable for managing money, and you are almost certainly earning far less interest on the idle cash than is available. Contact your bank and explain what you are doing. Perhaps they can put you into a money market account - think half checking half savings account - or put you in something else that works. Checking accounts do not pay enough interest. You need an operating account (pay bills for properties, etc. and that typically pays a low rate ) and a high-yield account to park cash that pays a high rate. Also, ask about fees. You do not need to pay fees for your accounts. If they charge, ask them to lower the fee to almost nothing. If not, go elsewhere. Hope that helps.

Hope this helps:

By law (according to my banks):
Banks are suppose to inform you that more than 6 withdrawal and/or transfer transactions from a savings account per month is considered a checking account as such "you" are trying to earn interest on a typical non interest bearing account.

Someone, somewhere figured out how to collect interest from a bank while saving money. The Federal Reserve took awhile and realized they where paying interest on saving accounts used as checking accounts. While checking accounts were non interest bearing and they can use your money for free.

Check around as I know 1 bank pays more interest on funds in a checking account than a savings account: provided you have and maintain a certain amount in the account.

Hmm, not even here supergovermentcontrolled Norway this is regulated like this..

Here in nanny state Finland, banks do that as a normal business practice. Not because it is regulated but because it makes business sense to the banks.
- Checking accounts for the daily use and transfers - almost zero interest
- Accounts where you park larger amounts, but transfers are limited - some interest
- Other more profitable but also more risky solutions.

Sgt. Zim, as previously stated this practice isn't exactly new news. A conversation ahead of time with your local branch manager coupled with the use of a Money Market Account and or HELOC, will limit your frustrations.

Art, it was news to me. As I said, my wife and I are only recently in the territory where this is a thing.

The savings account is getting converted to a MM account.

I use 2 banks, unfortunately, for reasons having to do with Mrs. Zim's ex-husband. One he knows about, one he doesn't. He ain't the praying type, but he'd better hope and pray the Zombie Apocolypse never happens. One of us is good from 1000 yards, the other couldn't hit a barn wall if he was standing inside the barn.

sgt_zim said:

A . . . The savings account is getting converted to a MM account. . . .

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If that MM account is with a bank, that most likely will also have restrictions too.

I maintain a savings and checking account and can transfer between the two on line. Allowed 6 transfers per month but I have never had an issue planning ahead enough to need more than a couple. I would think you could limit your transfers to one per week or less. That still gives you a couple extras if something comes up.

Yes be sure to confirm how many you are allowed with a money market account.

This is all quite interesting. For the last few years I have taken out $10k cash from my checking account to take to Africa. Not once have I had an issue. Of course there’s been a strange black suburban parked on my street on and off for quite some time now.

I have been meaning to post but have been busy this week. I work in the retail banking industry at management level

I am not at liberty to say exactly, but there is a daily cash in/out threshold that would trigger additional but routine questions. Banks are also starting to set much lower dollar amounts in which to ask the same additional questions because customers either intentionally or unintentionally do multiple smaller transactions in which the sum adds up to that magic number.
Banks only have I think 10 days after a transaction to provide the gov all the required customer info. There are huge fines and other consequences such as an acquisition not being approved if banks fail to report.

Folks think they are all cute and try to fight answering questions. All this does is piss me off, piss you off, and in the end you give the bank the info anyway (and your name probably reported as suspicious)
If you come in getting thousands of dollars of cash, yeah we are going to ask for you SSN, address, phone, ID, and occupation. If you don't want to give it, you can take your happyass right down the street because banks do not have to cash a check drawn on our bank. We cash on-us checks for non-customers as a courtesy to our customer; when a customer writes a check it's really intended to process through the banks/fed.

As to savings accounts and money markets, you are limited to 6 transactions of a certain category a month. This would include phone transfers, bill pays, and online transfers. However, and what the op's bank probably didnt mention bc backoffice doesn't communicate well to employees, you can come into the bank and do as many in person transfers and cash withdrawals as you would like - no limit. In all honesty, it's probably easier just to have 2 checking accts as opposed to a checking and basic saving. I think I personally have like 7 checking accounts for all my various slush funds (new car, vacation, wife's misc, hunting, college, etc.)

The best thing you can do is form a relationship with the branch manager/staff (hard at big banks because toxic sales culture leads to high turnover), give us a box of candy once a year, and not constantly pester us with stupid stuff. A good relationship can get you a fee reversed, free checks, and various problems expedited.