We have been classifying our Savings accounts as ATS accounts on the call report. Our brochure for these accounts states that they are allowed to have 4 withdrawals per month. They will be charged a dollar for any withdrawals over that. I know that savings accounts limit the amount of withdrawals but if they exceed that amount do they have to switch to another type of account or will a service charge suffice?
On the other hand if these are truely ATS accounts, can we charge a fee for going over 4 withdrawals per month? Unless these are linked to automatically transfer money to another account, these are not ATS accounts. Classifying savings accounts as ATS accounts can cost you money, because ATS accounts are transaction accounts subject to reserve requirement percentages. Do these "so-called" ATS accounts have to be linked to another account? If we are reporting these accounts on the call report as transaction accounts, it looks like the only options under transaction accounts are Demand Deposits, NOW Accounts, ATS Accounts, Telephone, and preauthorized transfer accounts which category would they fit under?
Our savings accounts allow the customer to exceed 6 withdrawals per month; we just charge them a fee but we never close the account or move the funds if they exceed 6 withdrawals per month continuously.
Will these types of accounts then be considered transaction accounts? Yes, they would be considered transaction accounts.
Assuming that you've reserved the right to require notice of withdrawal, any of the accounts that qualify under NOW account ownership restrictions could be classified as NOW accounts. Those that could not would have to be classified as savings accounts subject to the limitations or as interest-bearing DDAs. As you've described them, they simply do not fit the legal definition of ATS accounts. ATS accounts have alway confused me.
To be an ATS account, are the only allowable transaction automatic transfers? For instance, auto transfers for bounce protection only? No other withddrawals allowed?? Say you'll haunt me - Stone Sour. Notwithstanding any other provision of this section, a member bank may permit withdrawals to be made automatically from a savings deposit that consists only of funds in which the entire beneficial interest is held by one or more individuals through payment to the bank itself or through transfer of credit to a demand deposit or other account pursuant to written authorization from the depositor to make such payments or transfers in connection with checks or drafts drawn upon the bank, pursuant to terms and conditions prescribed by the Board.
It was repealed by Dodd-Frank, so it could just be that the authorization for ATS accounts is now dead. That may be an unintended consequence, but it could require banks to make some changes.
So by having it deemed an ATS account pretending this type of account still existed The only reason to mention them by definition, at least there was to allow interest on them in spite of the fact that they operate as a sort of "sub-account" of a DDA. Are there any 'pittfalls' that would need to be considered with this type of account? BTW, I appreciate the discussion Thoughts that come to mind: I can only suggest that there's really no longer any need for it.
They provided a way to effectively pay interest to individuals on a transaction account. For that matter, there's no longer any legal reason to need NOW accounts, either, unless a bank wants to be able to continue reserving the right to require a 7-day notice of withdrawal. I guess the reason I was thinking about it is due to excessive transactions. Perhaps those transactions should not have been being counted? It cannot become an ATS by default, because that would require you to reclassify the account on your Call Report and include it in the transaction account totals in your Reserve Balance calculations.
You either limit the transfers from a savings account, or, if you don't want to close it out or transfer the funds into a transaction account, convert it to a transaction account like a NOW or ATS account if the account qualifies under ownership restrictions , or to a DDA with or without interest, and start reserving against it.
Yes, as I added in a previous post, a different reserve bucket was one of the 'pittfalls' I could think of. Previous Topic Index Next Topic. ATS Accounts [ Re: John Burnett 10K Club Registered: Entire beneficial interest is held by one or more individuals Savings deposit Withdrawals to be made automatically through payment to the bank itself or to another account [of the depositor] pursuant to written authorization to make such payments or transfers in connection with checks are drafts drawn upon the bank.
There's nothing in there that would prohibit other sorts of withdrawals directly from the savings account. So it would not have to be strictly overdraft protection. Add to your Watched Users.More...