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Making Sense of Excess Activity

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Transcript: Wells Fargo Presents - Making Sense of Excess Activity

So, what is Excess Activity?

Excess activity is when you have too many withdrawals, transfers, and payments from your savings account. That's the simple answer. But it begs the question why are there limits on how often you can use your own money?

There’s a specific reason for this.  But, before we jump into specifics, let's first look at the different kinds of accounts banks offer.

First up, your checking account. This is designed for your everyday spending needs. You can use it to write checks, make purchases with your debit card, pay your bills, and transfer money as often as you'd like.

But savings accounts are different. Just look at the name. These accounts are used for saving. Not for everyday use. And there's a federal regulation called Regulation D that places a limit on the number of certain withdrawals,  transfers, and payments that can be made from  savings accounts. And every US bank is required to enforce it. This is to make sure that banks maintain reserves on various account types.

For certain withdrawals, transfers or payments from a savings account, you're allowed a limit of 6 per monthly fee period. This includes online, mobile, phone, and text-banking transactions, transfers for overdraft protection, and preauthorized automatic payments made to third parties. The bank also counts outgoing wires and payments to your Wells Fargo credit accounts toward the limit.

It is important to note that savings account cash withdrawals, transfers, or payments that you make in person at an ATM or with a teller at a branch are not included in the Reg D limit. Of course you can make as many deposits into your savings account as you'd like. Now let's go over what happens at Wells Fargo if you have Excess Activity.

Scheduled transfers and online banking transfers may be declined. We know that these transactions are convenient, but more than six transfers per month are not allowed. Watch for messages on the transfer screens that will warn you when you are approaching the limit.

If you exceed the limit, you'll be charged a $15 excess activity fee per transaction over the limit. Don't forget that Overdraft Protection transfers from your linked savings account also count toward the limit. Lastly, if a savings account has more than 6 transfers in a monthly fee period on more than an occasional basis,  we are required by the regulation to convert your savings account into a checking account or close it. We decline online and mobile transfers above the limit to help prevent this from happening.

So, how do you avoid a declined transaction or excess activity fee? Simple. The easiest way to avoid an excess activity fee is to use your checking account for frequent transfers. That's what your checking account is for! Also, take a peek at your account for any recurring scheduled transfers from your savings account. These can lead to excess activity.

If you absolutely have to transfer money out of your savings account, try this: Rather than transferring money out for each individual expense, plan ahead and transfer enough money for all your upcoming expenses in one larger transfer.  Finally, don't forget that ATM and branch cash withdrawals and deposits are unlimited. Just remember, your savings account is meant for saving. So if you minimize your transfers, you'll minimize your chance of having excess activity.

Have more questions about this or any other banking topic? Stop by your local Wells Fargo for a conversation with your neighborhood banker.