Transfers between checking accounts

[uncredited]

A fast question for all you bank heads.  After finding out that BNPL is about to become useless/undesirable, I got the idea to use my second checking account (same bank) as my own interest free (and non interest earning) BNPL lender and just shift 1500 into it and make my own "installment" payments into it for budgeting like I did with BNPL.

Are there limits or nonos involved with frequent online transfers between 2 checking accounts at the same FI?

How about savings? I know they removed the 6 a month limit in 2020 but IDK if they reinstated thI don't use the second checking for much. I got it for a second debit before I had a CC. Could be a good budgeting account.

[disdreamin]

Following. I have a number of savings and checking accounts at a CU, but I wonder if the rules governing those are different that those for banks (no idea whether that is true or not). I've had no issues moving money around amongst those accounts, but I'm not sure how many transfers I'd have to hit before I hit a threshold.

[SouthJamaica]

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@uncredited wrote:

A fast question for all you bank heads.  After finding out that BNPL is about to become useless/undesirable, I got the idea to use my second checking account (same bank) as my own interest free (and non interest earning) BNPL lender and just shift 1500 into it and make my own "installment" payments into it for budgeting like I did with BNPL.

Are there limits or nonos involved with frequent online transfers between 2 checking accounts at the same FI?

How about savings? I know they removed the 6 a month limit in 2020 but IDK if they reinstated thI don't use the second checking for much. I got it for a second debit before I had a CC. Could be a good budgeting account.

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Every institution has its own rules about things like that. Some would not limit you. Some would.

[Kforce]

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@disdreamin wrote:

Following. I have a number of savings and checking accounts at a CU, but I wonder if the rules governing those are different that those for banks (no idea whether that is true or not). I've had no issues moving money around amongst those accounts, but I'm not sure how many transfers I'd have to hit before I hit a threshold.

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I have moved money 3 or 4 times over a month

[uncredited]

Yeah, that makes some sense.  I was told years ago by tellers and a branch manager that it was the 6/mo limit from savings accounts (which the gov lifted by I don't think the bank ever did), but no limits on transaction accounts. 

But there's the things the tellers/CS/(and a somewhat clueless branch manager in a bank with annual manger churn) tell you, and then there's the reality of what the mysterious algorithms see, and I doubt there's much match between the two.

I love my idea of using my "spare" checking account as my own little "fake-BNPL lending slush" now that the party's over on the real deal, but I'm slightly uneasy in thinking the bank would like the frequent transfers even between their own two checkng accounts to simulate installments. Maybe it's not such a good idea after all. Oh well.

(FWIW, I'm not really doing anything with the account except running a phone bill through it to keep it alive.  Originally got it to have a spare debit, before I had credit, after an incident where my only card was compromized in one of the big hacks and I had zero ability to pay for anything.  Realized I needed another card, which meant another account. Now that I'm building the CC portfolio, that account doesn't have much of a purpose. I just keep a few hundred bucks in there and refresh it now and then to draw phone bills from. )

[disdreamin]

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@uncredited wrote:

I love my idea of using my "spare" checking account as my own little "fake-BNPL lending slush" now that the party's over on the real deal, but I'm slightly uneasy in thinking the bank would like the frequent transfers even between their own two checkng accounts to simulate installments. Maybe it's not such a good idea after all. Oh well.

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I'd be surprised if this was an issue. Out of curiousity, how often are you thinking you'd make transfers? If it's a daily thing, maybe I'd reconsider, but a couple times a week wouldn't make me think twice.

[Anonymalous]

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@uncredited wrote:

Yeah, that makes some sense.  I was told years ago by tellers and a branch manager that it was the 6/mo limit from savings accounts (which the gov lifted by I don't think the bank ever did), but no limits on transaction accounts. 

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The Fed lifted the 6 transactions/month limit on savings/money market accounts in April 2020, but the limit was a max, not a minimum. It's up to each institution to decide whether they will remove existing limits or fees, and if they do how they implement it. For example, some are reimbursing the fees, because it's an easier hack than eliminating them entirely. But they can keep the limits, or even be more restrictive, if they want -- I know some credit unions that limit their high yield savings to 1 transaction a month, and this didn't change when the rule changed. So it's very much a YMMV/check with your bank situation.

But from a practical standpoint, unless you're going crazy, I don't think most financial institutions will care. Checking accounts are designed for hundreds of transactions a month, after all, and many checks are converted into ACH transfers. It's less likely you'll hit a hard limit than get flagged by a machine learning-based fraud-prevention monitoring system.

If you're really interested in a set up like that, you could look into a bank account that uses a bucket system, where you can shift money (within a single account) between different buckets. That wouldn't involve interacting with the automated clearing house system.

[uncredited]

@disdreaminI'd be simulating "pay in 4" so I'd put a starting limit in there, and "pay it back" in scheduled installments, as though a real pay in 4.  But if I "borrow" from myself in "4 plans" in a month, that's 8+ transfers in a month.  Plus whatever normal other checking/debit/ACH activiti is going on in the main account. I guess that doesn't sound all that high technically.

But like @Anonymalous said, I'd be worried abut the algorithms picking it up as sketchy behavior or something.  I want to do it, but I'm not sure I have the nerve to test Skynet after talking about it here.

I remember when the Fed put that limit on there originally. I used to keep bare minimum in checking, like 500 bucks or something (of course back then 500 was actually worth something), and transfer from savings as needed, in case of a compromised card (which proved handy once.) Then one time I got the letter as a 1 time warning..... I then kept it under 2 a month for savings ever since.

Yeah, checking to checking shouldn't hit any issues, but the machines....the machines trouble me. It's probably a bad plan. I've heard of some bacnks having the bucket type system.  That might interest me in the future.  Though I don't have plans of changing banks right now, been with them for a long time, and while they have good and bad points, I haven't had real trouble with them, and no drama in banking is a good thing.  Even if they closed all my branches....