While the concept of ledgers has existed for as long as the concept of legal tender, modern ledgers originated in the British banking system of the late 17th century. Ledgers began as large handwritten books in which deposits, loans, currency exchanges and jewelry transfers were recorded using pen and ink. The system required exacting efficiency and organization, particularly for the tracking of large-scale entities.
Ledger to ledger or inter-account transactions offer several advantages. Automatic transfers offered by many commercial banking institutions allow funds deposited into checking accounts to be automatically transferred to savings accounts, allowing customers to integrate the habit of savings into their financial organization without reconsideration — an excellent way to establish good savings habits. Inter-account transactions also allow individuals with personal and business accounts in a single financial establishment to transfer funds seamlessly without necessitating the physical transfer of funds to different institutions.
The ease and instantaneous of modern ledger to ledger transfers can discombobulate individuals and businesses who do not keep their financial matters keenly organized. A dissolution of barriers between checking and savings as well as personal and business accounts can also be problematic for individuals who have trouble restraining themselves from differentiating their personal funds from those reserved for a business enterprise.
Many commercial banking establishments place limits on the amount of ledger to ledger transactions personal and commercial banking customers can conduct in a daily, weekly or quarterly period. Newly implemented federal regulations on online bank accounts limit the amount of inter-account transfers to six per statement cycle. These stipulations often include pre-authorized and automatic transfers as well as those made via telephone.