Is there a federal law that limits the number of withdrawls that I can make from my bank savings account ?

I have received a notice from my bank, which has warned me that under federal law I am only able to make six (6) pre-authorized or telephonic transfers per month to another bank account (i.e. transfering funds from savings account to checking account). Is this correct ? How can the federal goverment dictate what I can and cannot do with my finances ?? Wouldnt that be Communism ??!!

Yes, there is a banking regulation on this topic. The banks call it Regulation D.

To make a long story short, banks pay “insurance” on their customers’ deposits to the FDIC. Insurance rates are cheaper for their savings balances than their checking balances, which would give an incentive for a bank to call ALL of their accounts savings accounts to take advantage of the lower insurance. Regulation D has defined when an account stops acting like a savings account and starts acting like a checking account. A bank MUST identify these, and change them. If they don’t, they’ll get in big trouble for cheating on the insurance they pay on their deposits.

So, you discovered the limit. Yes, it is six. Past that number, your account starts to “behave” like a checking account, and must be classifed as such.

The Collapse of World Savings Bank – Feb 15, 2009