The bank/credit union stopped paying interest on my passbook/statement savings account because I made too many withdrawals. Can the bank do this?
Passbook savings and statement savings accounts are limited to no more than six withdrawals or transfers per calendar month or statement cycle. This limit applies to checks, debit card purchases, and electronic transfers but does not include withdrawals or transfers by ATM, in person, by mail, messenger, or telephone check (where payment is made by using your check account number and bank routing number).
Your bank or credit union must prevent withdrawals or transfers exceeding these limits and must contact you if you exceed them. If you continue to exceed these limits after the bank or credit union has contacted you, the bank or credit union must either:
- Close the account and place the funds in a transactional account such as a checking account that does not pay interest; or
- Take away the transfer or check writing capabilities of the account.
If you wrote too many checks and your bank or credit union places your money into a checking account, you may no longer earn interest.