Depository services include checking and savings accounts, and transfer of funds (e-payments through online banking or debit cards). A number of regulations affect the rules governing these services and protect your rights to receive timely information about fees and interest paid. Your account agreement, descriptive brochures provided by banks, and bank staff can explain terms and answer questions you may have. You should also review "Answers About Bank Accounts" on HelpWithMyBank.gov.
The Federal Deposit Insurance Corporation (FDIC) insures all types of deposits—CDs and checking, savings, money market, and NOW accounts—held in all FDIC-insured depository institutions, including national banks. The permanent standard insurance amount is $250,000, per depositor, per insured depository institution for each account ownership category.
For more information about deposit insurance, visit the FDIC's website. In addition, bankers and consumers can call the FDIC at (877) ASK-FDIC (275-3342) for information on FDIC insurance coverage.
When writing a check, you have specific rights. See "Checking Accounts: Understanding Your Rights" and "Answers About Bank Accounts" for more information.
Electronic Fund Transfers
Electronic fund transfers (EFTs) instruct a financial institution to either credit or debit your account electronically. ATM transactions, direct payroll deposits, and online banking are examples of EFTs. To protect your rights in these transactions, the Electronic Fund Transfer Act (EFTA)
- restricts unsolicited issuance of ATM cards.
- requires institutions to inform you about EFT service terms and conditions.
- generally requires institutions to document EFTs with receipts and/or account statements.
- limits your liability for unauthorized transfers.
- establishes procedures to resolve errors.
See "Answers About Bank Accounts" for more information.
Electronic fund transfers (EFTs) instruct a financial institution to either credit or debit your account electronically. ATM transactions, direct payroll deposits, and online banking are examples of EFTs. To protect your rights in these transactions, the Electronic Fund Transfer Act (EFTA)
- restricts unsolicited issuance of ATM cards.
- requires institutions to inform you about EFT service terms and conditions.
- generally requires institutions to document EFTs with receipts and/or account statements.
- limits your liability for unauthorized transfers.
- establishes procedures to resolve errors.
See "Answers About Bank Accounts" for more information.
The Expedited Funds Availability Act requires banks to use a standardized hold period on deposits and to let you know when funds from deposits will be available. Many banks will post this information in the customer service area. See "Answers About Funds Availability" for more information.
Understanding Regulation CC (Availability of Funds)
When depositing items other than cash, it is important for consumers to understand the difference between available funds and collected funds.
Under Regulation CC, when an official instrument is deposited into a consumer's bank account, the bank must make those funds available to the consumer on the next business day. It takes approximately 10 days for a check to go through the clearing process:
- The payee deposits the check.
- The depositary bank sends the check for collection.
- The check is sent from the depositary bank to the Federal Reserve Bank or clearinghouse and then to the paying bank (drawee).
- The check is presented to the paying bank for payment.
- If the check is good, the paying bank sends payment (collected funds); however, if the check is bad, the paying bank returns the item as unpaid (uncollected funds).
- If the item is returned as unpaid, the depositary bank then debits the payee's account for the amount of uncollected funds.
You are probably familiar with the interest you can earn on savings accounts, money market accounts, and CDs. Banks may also pay interest on certain types of checking accounts. Depending on the type of account, the bank may restrict you to a certain number of withdrawals over a specified period. Early withdrawals on some types of accounts may result in an interest penalty. Your bank must provide you with information about the types of deposit accounts available to you, how and when they pay interest, and any restrictions on withdrawals, including early withdrawal penalties. See "Answers About Bank Account Disclosures" and "Answers About Interest-Bearing Accounts" for more information.
Overdraft protection is an agreement with a bank to cover overdrafts on a checking account. For these purposes, the term "bank" refers collectively to national banks, federal savings associations, covered savings association, and federal branches and agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency. Refer to HelpWithMyBank.gov.
An overdraft protection agreement typically involves a fee and generally limits overdrafts to a preset maximum amount. Banks are not required to offer any overdraft protection programs. Even when they do, banks may retain discretion to pay or not pay a particular overdraft transaction. Consumers should review the deposit account agreement with their bank and find out from the bank the terms and conditions of any overdraft protection programs that the bank may offer.
Under Regulation D, the Board of Governors of the Federal Reserve System (FRB) requires depository institutions (such as banks) to hold a certain amount of funds in reserve against their customers' deposits. The FRB uses reserve requirements (or reserve ratios) as one of the tools of monetary policy to manage the supply, availability, and cost of money. The FRB's overall goal is to maintain a healthy economy, with maximum employment and stable prices and interest rates. Read In Plain English: Making Sense of the Federal Reserve on the FRB's website for more information.
Time accounts are typically savings accounts that require you to leave your funds in the account for a fixed term. Usually these types of accounts require you to provide a certain amount of notice or to pay a penalty or fee if you remove your funds before the end of the term. See "Answers About Bank Accounts" for more information.
The Truth in Savings Act (TISA) entitles you to receive information from depository institutions to help you shop for financial services and make informed decisions about your accounts. TISA requires these institutions to give you information about fees, the annual percentage yield, the interest rate, and other terms for deposit accounts. You are entitled to receive this information
- when you open an account,
- upon request,
- when the terms of your account are changed,
- when a periodic statement is sent, and
- for most time accounts, before the account matures.
In general, a "time account" is a savings account that requires you to leave your funds in the account for a fixed term. Usually these types of accounts require you to provide a certain amount of notice or to pay an interest penalty if you remove your funds before the fixed term ends. See "Answers About Bank Accounts" for more information.
Interim Final Rules
| Date | ID | Title |
|---|---|---|
| 04/26/2023 | NR 2023-41 | OCC Issues Guidance on Overdraft Protection Programs |
| 04/26/2023 | OCC 2023-12 | Overdraft Protection Programs: Risk Management Practices |
| 12/08/2021 | NR 2021-129 | Overdraft Protection Programs: Risk Management Practices |
