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

Mike Schenk, chief economist for the Credit Union National Association, said he didn’t have comprehensive data on what credit unions were doing. But, he said, his calls to several credit unions found that “most don’t charge those fees anymore.” The association has long supported an elimination of the transaction cap as best for depositors, he said, and many credit unions routinely waive the fees anyway.

Nevertheless, some credit unions, including Alliant and PenFed, still cite the old federal six-withdrawal limit restriction on their websites. “If I exceed these limitations my account will be subject to an excessive transaction fee and may be closed,” PenFed’s general savings disclosure says.

Eliminating transaction caps may end up changing consumer behavior, said Simon Zhen, senior research analyst at MyBankTracker.com. Savings accounts typically offer higher rates than checking accounts because they are designed for money to remain there and grow. If the distinction between a savings account and a checking account is eliminated, consumers may have less reason to use checking accounts, and banks may have less incentive to offer better rates on savings accounts.

“If you take the limit away, what’s the difference between a saving account and a checking account?” Mr. Zhen asked.

Here are some questions and answers about savings account fees:

How can I avoid excessive savings withdrawal fees?

Set up text or email alerts to notify you when you are approaching the account’s limit. You can also consider using a line of credit, rather than linking your checking account to your savings account, to cover any overdrafts and reduce unnecessary transfers.

Also, savings withdrawal limits apply to the number of transactions, not the amount. If you know you’ll be needing some cash from your savings account, consider making one or two larger withdrawals instead of several smaller ones, said Greg McBride, chief financial analyst at Bankrate.com. (Separately, some accounts may limit the total amount of cash that can be withdrawn or transferred in a single transaction.)

What are current interest rates paid on savings accounts?

Even on “high yield” accounts at online banks, which typically pay higher rates because they have no branch network to maintain, annual percentage yields hover around 0.40 or 0.50 percent — far below what those accounts typically paid a year ago. Still, that’s better than the average savings account rate of 0.14 percent, according to DepositRates.

What if I need to withdraw money in excess of my account’s transaction limits?

Contact your bank to discuss your situation and ask for a waiver of the fee, Mr. McBride said. Banks are likely to be flexible, given the continued economic fallout of the pandemic.