Warning--deposit large checks at your peril

[criticalbass]

Well, "peril" may be too strong a word, but I learned recently that if one deposits a check over 5K in a bank or a credit union, they can, at their "discretion" hold your money up to eleven days.

In my case it was just a matter of principle, but if I had needed the entire amount, it would not have been available. When the branch manager (IBC) was pressed, his explanation was essentially "because I can."

Banks are within their rights to do this if they think the check may be suspect or if there has been what they consider to be unusual activity on the account. Neither applied in my case--long term customer, no problems, special account with boring repetition each month.

I think the takeaway from all this is that everyone needs to know about it.

The next time I make a large deposit (it was a check from a reputable brokerage firm) I will seek out the manager (of my new bank--skroo IBC) and get assurance that funds will be available without the big delay.

One internet article used the phrase "pony express speeds" when referring to this idiocy.

I did learn that IBC is not unique or even unusual in doing this.

 

[1shott]

They did that so they can draw interest on it.

My bank did that with a rather large check a few years ago, only held it for 24 days...I was pissed to say the least. Check cleared 2nd day after deposit.

 

[peanut]

Maybe they prefer $20,000 in coin.

 

[DanB]

Imagine what I go through with checks $300-500k. I'm taking to our account manager weekly

 

[SDarkRage]

I had this happen a couple times before. Since then I just walk in, hand them the check, tell them to cash it. Take the cash, walk back to the little counter with the deposit slips, fill it out, walk back to the teller, and then tell them you are making a cash deposit. Pisses em off everytime, but my funds are always available.

 

[Glocktogo]

It's not entirely at their discretion: http://en.wikipedia.org/wiki/Expedited_Funds_Availability_Act

If your bank doesn't have an explanation or the transaction doesn't meet one of the "exceptions", they may be in violation. Keep in mind that banks make a lot of money off the float: http://en.wikipedia.org/wiki/Float_(money_supply)

 

[KOPBET]

Tell your banker to read Federal Reserve Regulation CC. Know your rights.

http://www.bankrate.com/brm/news/chk/20020802b.asp

For certain types of deposits, Regulation CC permits financial institutions to delay, for "a reasonable period of time," the availability of the funds. The Fed generally defines "reasonable" as one additional business day for on-us checks, five additional business days (total of seven) for local checks and six additional business days (total of 11) for nonlocal checks. Institutions may impose longer holds in exceptional cases.

Large deposits (greater than $5,000) -- Any amount greater than $5,000 may be held. Banks must make the first $5,000 of the deposit available for withdrawal according to the bank's availability policy and the remainder within the "reasonable" time frames.

 

[Go_Ordnance]

Well, "peril" may be too strong a word, but I learned recently that if one deposits a check over 5K in a bank or a credit union, they can, at their "discretion" hold your money up to eleven days.

In my case it was just a matter of principle, but if I had needed the entire amount, it would not have been available. When the branch manager (IBC) was pressed, his explanation was essentially "because I can."

Banks are within their rights to do this if they think the check may be suspect or if there has been what they consider to be unusual activity on the account. Neither applied in my case--long term customer, no problems, special account with boring repetition each month.

I think the takeaway from all this is that everyone needs to know about it.

The next time I make a large deposit (it was a check from a reputable brokerage firm) I will seek out the manager (of my new bank--skroo IBC) and get assurance that funds will be available without the big delay.

One internet article used the phrase "pony express speeds" when referring to this idiocy.

I did learn that IBC is not unique or even unusual in doing this.

I'd be closing my account(s), and if asked would let the branch manager know "Because I can".

 

[SDarkRage]

My bank routinely held my monthly 5k deposit checks for around 7 days. Their excuse was that I didn't have a history of big check deposits so its just safer for them (after 3 years I was getting tired of this). Next month rolled around, took my check down and cashed it. Then deposited it. The manager didn't like this. Told him I didn't care for his attitude about MY money. Told him if he didn't like it, I'd pull all my money and leave. He blanched and said "No sir! We do not have a problem here!" I'm kind of a dick like that. Now, I still have a checking account there with $50 in it. Just enough to keep the account open to cash my checks. I then turn around and go to my friendly bank and deposit the money there.

 

[338Shooter]

They usually ask me if I think the check is good. Normally been up to me if I have the hold on or not. I usually decline to put it in as long as I can cover the funds.