ACH.......is money market acct checking or savings?

[kaneohe]

I was filling out ACH form today and it asks whether the account being linked
is checking or savings. It reminded me that previously I had linked money market accounts and was told to ask the bank whether they were checking or savings...........and apparently different banks can choose to answer differently.
If you give routing number and account number and that uniquely defines that account, then why do you need to specify checking or savings and what is the meaning when one bank can call it checking and another can call it savings?
And what happens if you don't ask the bank and make the wrong choice?

 

[audreyh1]

I think in a bank they are usually checking.

There are Federal rules that limit withdrawals on some types of savings accounts, and as far as I have been able to tell, all savings accounts I've seen obey the limit of 6 ACH withdrawals per statement month rules.

 

[kaneohe]

Can't recall what the money market accts I have were classified as but you're probably right..........still confusing to me since the ones I'm familiar also have that 6 transaction limit just like savings........so they have the same limit as savings but allow checks like checking.........and it seems,since it depends on the institution......perhaps there is a non-standard answer even if they do the same thing?

ETA: Just got reply from PenFed.......after giving up waiting on the phone yesterday...... so 1 day by e-mail, not bad....
They consider it a savings account. Maybe I should ask them.............

 

[bingybear]

the account number you are using... what type of account is it?

 

[audreyh1]

Can't recall what the money market accts I have were classified as but you're probably right..........still confusing to me since the ones I'm familiar also have that 6 transaction limit just like savings........so they have the same limit as savings but allow checks like checking.........and it seems,since it depends on the institution......perhaps there is a non-standard answer even if they do the same thing?

ETA: Just got reply from PenFed.......after giving up waiting on the phone yesterday...... so 1 day by e-mail, not bad....
They consider it a savings account. Maybe I should ask them.............

If there is a 6 withdrawals limit per statement period - it's a savings account.

 

[always_learning]

I know the mystery has been solved, but I thought I'd add a comment anyway.

Typically, money market accounts are considered a savings vehicle. To muddy the waters, some have check writing privileges and this is where confusion often occurs.

In the future, one way to save yourself the minor headache of contacting the bank to ask them, just go to their website and see where they have the account listed under their offerings. For instance, PenFed's site lists the money market as a savings account option.

As to the question as to what difference it makes on the form you're filling out, back in the old days, it was to help the person at the bank (either the sending or the receiving institution) in finding the correct account in case the owner mis-typed or mis-wrote a number. This was a common issue when account numbers were short and usually just a single digit off from one another. Since things are automated now, I don't know that there is a reason for asking for it these days.

 

[kaneohe]

.............................

1)Typically, money market accounts are considered a savings vehicle. To muddy the waters, some have check writing privileges and this is where confusion often occurs.

2)In the future, one way to save yourself the minor headache of contacting the bank to ask them, just go to their website and see where they have the account listed under their offerings. For instance, PenFed's site lists the money market as a savings account option.

3)As to the question as to what difference it makes on the form you're filling out, back in the old days, it was to help the person at the bank (either the sending or the receiving institution) in finding the correct account in case the owner mis-typed or mis-wrote a number. This was a common issue when account numbers were short and usually just a single digit off from one another. Since things are automated now, I don't know that there is a reason for asking for it these days.

always............thanks for your comments.

1)All 3 of my money markets have check-wrìting so I assumed this was universal. Small sample tho.........so perhaps not........

2) I got excited about your general theory of money markets.......works for PenFed..............but.....Ally lists them under Checking & Savings and Synchrony lists them under Products ..........so I am relegating your theory to the special theory of money markets

3) Interesting idea...............I replied to the PenFed person who told me it was savings and asked them for more background so perhaps she will enlighten me.
btw..........it's more than a minor problem waiting on hold. Glad I gave up and was pleased by the 1 day response by e-mail.

 

[ncbill]

My bank no longer allows check writing (well, they've blocked check ordering) on money market accounts because of the 6/month withdrawal limitation.

So you won't accidentally go over and creates headaches for the bank.

 

[gwraigty]

We've found that with money market savings accounts at Ally Bank, when linking them online to outside financial institutions for transfer or direct deposit, you have to select Checking, not Savings. Selecting Savings has resulted in an immediate failure message. I remember researching this at one time. The general reasoning given was that if the account allows check writing, it's considered Checking for the above purposes, even though the account has the word Savings in the title and has to follow the 6 payments-to-others-limit per statement period.

 

[kaneohe]

We've found that with money market savings accounts at Ally Bank, when linking them online to outside financial institutions for transfer or direct deposit, you have to select Checking, not Savings. Selecting Savings has resulted in an immediate failure message. I remember researching this at one time. The general reasoning given was that if the account allows check writing, it's considered Checking for the above purposes, even though the account has the word Savings in the title and has to follow the 6 payments-to-others-limit per statement period.

now I'm not surprised I'm confused......PenFed says savings .....well , technically, 1 person at PenFed says savings. Maybe I need to do my 2/3
or 51/100 data gathering. Maybe it's a local rule and not a Fed one.

I know Synchrony doesn't allow savings accounts in IRA but it does allow money market accts.......Cuz................... and yet Ally allows savings accts.

 

[gwraigty]

now I'm not surprised I'm confused......PenFed says savings .....well , technically, 1 person at PenFed says savings. Maybe I need to do my 2/3
or 51/100 data gathering. Maybe it's a local rule and not a Fed one.

I know Synchrony doesn't allow savings accounts in IRA but it does allow money market accts.......Cuz................... and yet Ally allows savings accts.

In your OP, you asked whether you should select Checking or Savings for ACH purposes on a Money Market Account. My answer, according to previous experience (as recently as 3 times in the last year), is Checking. However, yes, a Money Market Account at a bank is considered a Savings account by the bank. PenFed did answer correctly as to what type of account it is. It is definitely a savings account, not a checking account, even though you may have a checkbook for it. Yet, for ACH, direct deposit purposes, we have always had to select Checking for accounts that offer a checkbook, whether it be a Money Market Savings Account or a Checking Account. Savings would be the option for a Savings Account that doesn't offer a checkbook.

 

[kaneohe]

I'm starting to think that gwraigty is right..............you don't really know until you set up the ACH and it passes or fails.

Advice by institution A where you are setting up the ACH to ask institution B (that you are trying to link) what their money market account is (checking or savings) is of questionable value since the first line reps don't really know even if you make it clear that it has to do w/ ACH purposes. They will give you an answer and probably have no doubt but it could be and often is wrong.

Today I got this brilliant idea to find out what my money market account links at my hub A were classified as. These are established links that have been working for years. The rep told me they were both classified as checking
for ACH purposes. I asked what would happen if I had given him the wrong info during setup.......would they automatically correct it. He said they would notify me first. I don't recall any notices so either (by accident) I got the right info , my memory is bad, or they just automatically correct it. ........btw, the current info if I call and ask B is a mixed bag.

My conclusion.........only the computers know how they are programmed so don't spend a lot of time worrying about it. Take the first answer you are given. If it is wrong, you will know soon enough and so change it.

Whether money market accounts with limited checkwriting could be classified as savings account is a mystery to me. If not , why doesn't institution A just ask me whether it has check writing instead of telling me to ask B.

 

[always_learning]

always............thanks for your comments.

1)All 3 of my money markets have check-wrìting so I assumed this was universal. Small sample tho.........so perhaps not........

2) I got excited about your general theory of money markets.......works for PenFed..............but.....Ally lists them under Checking & Savings and Synchrony lists them under Products ..........so I am relegating your theory to the special theory of money markets

3) Interesting idea...............I replied to the PenFed person who told me it was savings and asked them for more background so perhaps she will enlighten me.
btw..........it's more than a minor problem waiting on hold. Glad I gave up and was pleased by the 1 day response by e-mail.

I was being optimistic about it being a minor headache to call. Sorry.

Savings would be the option for a Savings Account that doesn't offer a checkbook.

I think you are correct and that this is the way to go for a first try and if it gets bounced, then try running it as checking.

I'm starting to think that gwraigty is right..............you don't really know until you set up the ACH and it passes or fails.

Advice by institution A where you are setting up the ACH to ask institution B (that you are trying to link) what their money market account is (checking or savings) is of questionable value since the first line reps don't really know even if you make it clear that it has to do w/ ACH purposes. They will give you an answer and probably have no doubt but it could be and often is wrong.

Today I got this brilliant idea to find out what my money market account links at my hub A were classified as. These are established links that have been working for years. The rep told me they were both classified as checking
for ACH purposes. I asked what would happen if I had given him the wrong info during setup.......would they automatically correct it. He said they would notify me first. I don't recall any notices so either (by accident) I got the right info , my memory is bad, or they just automatically correct it. ........btw, the current info if I call and ask B is a mixed bag.

My conclusion.........only the computers know how they are programmed so don't spend a lot of time worrying about it. Take the first answer you are given. If it is wrong, you will know soon enough and so change it.

Whether money market accounts with limited checkwriting could be classified as savings account is a mystery to me. If not , why doesn't institution A just ask me whether it has check writing instead of telling me to ask B.

It has been many years since I worked in banking, so I looked around online to see if there was a standard/rules. It seems to be up to the institution now, as to what designation those accounts are given.

Back in the day, a Money Market was simply a savings account that earned extra interest and required a certain amount of money to open & maintain, and had a limited withdrawal frequency. I remember the excitement/marketing when the money market at my institution began offering check writing. I think that is when the line started to blur as to what the vehicle really was.

Nowadays, it seems more like a hybrid between the two. And, since everything is done automatically, there isn't a real person setting eyes on the transactions that get bounced to see what happened. When I worked in the department where payroll ACH came in, if something bounced, a real person would look at the person's account to see where it was most likely to go and if it wasn't obvious, THEN we would bounce it fully. I guess chalk this up to companies not keeping up with advances in tech and causing issues for the users.

 

[gwraigty]

In your OP, you asked whether you should select Checking or Savings for ACH purposes on a Money Market Account. My answer, according to previous experience (as recently as 3 times in the last year), is Checking. However, yes, a Money Market Account at a bank is considered a Savings account by the bank. PenFed did answer correctly as to what type of account it is. It is definitely a savings account, not a checking account, even though you may have a checkbook for it. Yet, for ACH, direct deposit purposes, we have always had to select Checking for accounts that offer a checkbook, whether it be a Money Market Savings Account or a Checking Account. Savings would be the option for a Savings Account that doesn't offer a checkbook.

I think you are correct and that this is the way to go for a first try and if it gets bounced, then try running it as checking.

You quoted only my last sentence and got my advice to the OP backwards. Above is the entirety of what I said. Since OP is trying to link a Money Market Account, I recommended above (and in my earlier post) that OP choose Checking, as has worked for us with these types of bank accounts. If one is linking a pure Savings account that offers no check writing whatsoever, then choosing Savings would be the option.

 

[always_learning]

You quoted only my last sentence and got my advice to the OP backwards. Above is the entirety of what I said. Since OP is trying to link a Money Market Account, I recommended above (and in my earlier post) that OP choose Checking, as has worked for us with these types of bank accounts. If one is linking a pure Savings account that offers no check writing whatsoever, then choosing Savings would be the option.

Ooh. Sorry. I had moved on to a generic conversation about money markets and how they are classified. I just used your last sentence as an 'in the future' sort of thing and it didn't even occur to me that my post screwed things up. That was not my intention. Apologies.

 

[gwraigty]

Ooh. Sorry. I had moved on to a generic conversation about money markets and how they are classified. I just used your last sentence as an 'in the future' sort of thing and it didn't even occur to me that my post screwed things up. That was not my intention. Apologies.

It's OK. It's the bank's fault for making a "hybrid" product.