At my bank, if I deposit a paper check drawn on an ordinary personal or corporate account, and the amount is sufficiently large, my bank will hold most of that money for several days.
I have a few questions about the best way to do this:
[ul]
[li]Assuming the check is drawn on a bank where I can cash it in person, can I ask the paying bank to arrange a wire transfer into my account?[/li]
[li]Are banks usually willing to do that for non-customers? (We’ll assume the paying bank is a different institution from my own bank.) [/li]
[li]And would this work to avoid a hold being placed on the funds?[/li][/ul]
I know I did say “ask”, but I meant to include the possibility that the cashing bank would do it for a fee. If so, is the fee usually a percentage of the total amount, or is it a (stepwise) flat rate?
This would have been the best option, obviously, but for one reason and another, it’s a done deal and I’ll be getting a paper check.
At least I should be able to buy a cashier’s check at the cashing bank, if I can’t get the wire transfer done.
These days, who knows. A few years ago I cashed in a passle of United States Savings I Bonds, and they wanted to place a hold on those. You know how Treasury is… Kinda sketchy I guess.
When you deposit a check, it actually takes a day or two for the two banks to talk to each other and arrange to transfer the money out of the payer’s account over to your bank. Thus, large deposits by check are put on hold to make sure the payer actually has enough money in their account to cover the check before the bank pays out the cash.
If your only option to be paid is by a standard check, and you have to deposit it to your own bank, you probably can’t get around the hold unless your bank trusts the payer enough, and likes you enough, to take the risk of not being able to actually get the money from the payer.
However, if you can find a branch of the bank that the check is drawn on, they may be able to cash it for you, and then you can walk the cash over to your bank and deposit it. Otherwise, give the check back and ask the payer to either wire you the money or get a cashier’s check; those methods deduct the amount from the payer’s account immediately, so the recipient bank doesn’t have to worry about being stiffed.
Edit: it seems like you are stuck with the check… I’m not sure banks will do wire transfers for non-customers even for a fee, but as you said you can get a cashier’s check.
If you have a Euro account, the payer should be able to initiate a SEPA transfer via direct deposit or electronic wire transfer in real time and your bank is not allowed to rip you off. In the USA things are much more Byzantine; next time maybe get the guy to pay cash.
SEPA transfers are certainly not done in real time—it can take several days for a SEPA transfer to go through, even between two accounts held by the same individual at the same bank. The ECB claims that it normally takes “one business day”, so if you initiate a transfer on Friday night, it might not get completed until Tuesday morning. But I’ve experienced long delays even during the working week.
That’s supposed to change in November 2017, though, with the implementation of SCTinst payments.
As has been said by another poster, SEPA is not instantaneous, at least not necessarily. The time it takes for the payment to be completed depends on the payment system used by the banks involved - SEPA is not itself a payment system, it’s merely a legal framework governing the private law relations of a payment; but banks are free to use any kind of payment system they are affiliated with in order to settle a transaction within the legal framework of SEPA. Some banks allow you to make a payment with the specific instruction that it be routed via Target2, the euro area’s real-time payment systems. Such payments are, indeed, instantaneous. But that would be rare since the fees for Target2 payments are comparativley high. So Target2 is usually used either for very large transactions, or in order to settle the net amounts which remain after banks have set off against each other incoming and outflowing cash flows arising from other payment systems.
I once deposited a paper check for $35,000 from The Revocable Trust of PO Box 37285, Phoenix, AZ … I asked the teller how long until the funds were available for withdrawal … she looked at me funny, checked her screen and told me right away …
My business runs a fairly high top-line … the $35,000 is kinda chump change in comparison to my account balance … so the bank liked me A LOT !!!
Wire transfer fees are flat rate and generally $20 to $40. Your receiving bank ought not hold funds coming in via wire transfer. But there’s a lot of ways for what’s supposed to happen to differ from what really does happen.
Getting a cashier’s check from the paying bank and carrying it to your bank is better than nothing. But there are so many counterfeit cashier’s checks now that they’re not that much better than the original check you’re getting from whoever.
By far the biggest determinant of whether there’ll be a hold or not is your own bank’s policies and the size of the deposit vs. your normal and recent balances and flows. Asking them is far more useful than asking us.
Definitely you should talk to the manaqer at you own branch ahead of time and ask him/her what will happen when you wire transfer the money, or you bring in a cashier’s check, or the original check. Or even a tall stack of Benjamins with white powder adhering.
If they know about your plan beforehand they’ll probably be able to release funds immediately. Far smarter to pre-grease the skids with the manager than find yourself arguing with a teller at 4pm on Friday when they already placed the hold.
IOW, ask them what works best for them to help you achieve your goal.
A couple weeks ago, my wife and I deposited a fairly checque for $5000 in a bank where we keep investments totaling well over a half million. This was for the purpose of paying taxes and we really needed the money right away. Still they insisted on putting a five business day hold on it. The money was debited from the account the cheque had been drawn on the same day, but the hold continued for 5 business days. We were really pissed.
I just contacted my bank, and they said that for a cashier’s check, or a wire transfer, the entire deposit is released by the end of the business day. Presumably that’s typical.
Long story short, the checks (for it was actually two that arrived at my home today) turned out to have been drawn on BofA, but when I went there and attempted to trade them for a cashier’s check, they wouldn’t do it. I hadn’t expected them to do it for free, but that they wouldn’t do it at all was definitely surprising. In the end it didn’t matter too much because the hold which my own bank put on the deposit wasn’t nearly as stringent as I had thought it would be.
Still, what do people do in situations like this when they’re “unbanked?” I know, check cashing centers are the most obvious option, but I doubt that they can handle transactions larger than some established maximum amount.
The unbanked could demand the payment be in cash (illegal transactions), open up a new banking account, or deposit in a relative’s/friend’s account–third party check. [there is a massive amount of concern with both money laundering and fraud.]
*Next business day: most banks say that they “generally” make funds available on the business day after you make a deposit, but there are exceptions. Cash deposits made to a bank employee must be made available within one business day (and those deposits are often available immediately). Certain types of checks must also be available in one business day:
Official bank checks like cashier’s checks
Checks issued by the U.S. Treasury (such as your tax refund or Social Security)
Checks for $200 or less
Checks drawn on the same bank that you’re depositing to
USPS money orders
If the total amount of deposits by check in one day is more than $5,000, or if a check is endorsed by anybody other than the payee to whom it was issued, banks can add a hold.
Electronic deposits like wire transfers and direct deposit are also generally available within one day.*
As the post you quoted said, the issuing bank (BofA) flat refused to cash checks drawn on their bank. Not just refused to do it for for free; refused to do it at all.
He didnt say that *“Long story short, the checks (for it was actually two that arrived at my home today) turned out to have been drawn on BofA, but when I went there and attempted to trade them for a cashier’s check, they wouldn’t do it.
*”
Which I believe is illegal. Banks must honor all checks drawn on them with reasonable limitations. “Reasonable” meaning things like if you are cashing a check for $50,000 they are allowed adequate time to transfer the cash to that branch.
