I went to the bank today and deposited a cashier’s check. I then requested another cashier’s check payable to a third party. I was told that I would have to wait several business days for the funds to clear before I could obtain a cashier’s check disbursing these funds! What is going on here? Shouldn’t the funds have been immediately available? Otherwise, what’s the point?
Even cash may not be immediately accesible to you depending on the terms of your account. A cashier’s check is not cash and the bank may want to cash it before they give you access to the funds.
I thought that a cashier’s check is the same thing as a bank check - it’s a check that happens to be from a financial institution. While “Wells Fargo” is less likely to bounce a check than “Joe Dokes” I can see the receiver still wanting to verify sufficient funds before they let the money go out the door, make sure it isn’t fraudulent, etc.
Any time you have questions about when your check has to clear, you should refer to the following regulation, Sec. 229.12, part of the Federal Reserve’s reg CC:
http://www.bankersonline.com/regs/229/229-12.html
Regulation CC
Sec. 229.12 Availability schedule.
(a) Effective date. The availability schedule contained in this section is effective September 1, 1990.
(b) Local checks and certain other checks. Except as provided in paragraphs (d), (e), and (f) of this section, a depository bank shall make funds deposited in an account by a check available for withdrawal not later than the second business day following the banking day on which funds are deposited, in the case of–
(1) A local check;
(2) A check drawn on the Treasury of the United States that is not governed by the availability requirements of Sec. 229.10©;
(3) A U.S. Postal Service money order that is not governed by the availability requirements of Sec. 229.10©; and
(4) A check drawn on a Federal Reserve Bank or Federal Home Loan Bank; a check drawn by a state or unit of general local government; or a cashier’s, certified, or teller’s check; if any check referred to in this paragraph (b)(4) is a local check that is not governed by the availability requirements of Sec. 229.10©.
© Nonlocal checks–(1) In general. Except as provided in paragraphs (d), (e), and (f) of this section, a depositary bank shall make funds deposited in an account by a check available for withdrawal not later than the fifth business day following the banking day on which funds are deposited, in the case of–
(i) A nonlocal check; and
(ii) A check drawn on a Federal Reserve Bank or Federal Home Loan Bank; a check drawn by a state or unit of general local government; a cashier’s, certified, or teller’s check; or a check deposited in a branch of the depositary bank and drawn on the same or another branch of the same bank, if any check referred to in this paragraph ©(1)(ii) is a nonlocal check that is not governed by the availability requirements of Sec. 229.10©.
(2) Nonlocal checks specified in appendix B-2 to this part must be made available for withdrawal not later than the times prescribed in that Appendix.
(d) Time period adjustment for withdrawal by cash or similar means. A depositary bank may extend by one business day the time that funds deposited in an account by one or more checks subject to paragraphs (b), ©, or (f) of this section are available for withdrawal by cash or similar means. Similar means include electronic payment, issuance of a cashier’s or teller’s check, or certification of a check, or other irrevocable commitment to pay, but do not include the granting of credit to a bank, a Federal Reserve Bank, or a Federal Home Loan Bank that presents a check to the depositary bank for payment. A depositary bank shall, however, make $400 of these funds available for withdrawal by cash or similar means not later than 5:00 p.m. on the business day on which the funds are available under paragraphs (b), ©, or (f) of this section. This $400 is in addition to the $100 available under Sec. 229.10©(1)(vii).
(e) Extension of schedule for certain deposits in Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands. The depositary bank may extend the time periods set forth in this section by one business day in the case of any deposit, other than a deposit described in Sec. 229.10, that is–
(1) Deposited in an account at a branch of a depositary bank if the branch is located in Alaska, Hawaii, Puerto Rico, or the U.S. Virgin Islands; and
(2) Deposited by a check drawn on or payable at or through a paying bank not located in the same state as the depositary bank.
(f) Deposits at nonproprietary ATMs. A depositary bank shall make funds deposited in an account at a nonproprietary ATM by cash or check available for withdrawal not later than the fifth business day following the banking day on which the funds are deposited.
Money is the hardest form of payment to counterfit.
The fact that a cashiers check can be forged is their concern.
Basically, by the books, if you walked into the bank at 0900 hours on the 1st of the month, with a cashier’s check, they don’t have to make the full funds available to you until the 3rd of the month.
If you walk at 1500 hours, which is technically the next business day, full funds would be available on the 4th of said month.
The Index page to reg CC is here:
http://www.bankersonline.com/regs/229/229.html
OOOPS. I just lied. It appears your availability is governed by next-day availability:
http://www.bankersonline.com/regs/229/229-10.html
Sec. 229.10 Next-day availability.
(a) Cash deposits. (1) A bank shall make funds deposited in an account by cash available for withdrawal not later than the business day after the banking day on which the cash is deposited, if the deposit is made in person to an employee of the depositary bank.
(2) A bank shall make funds deposited in an account by cash available for withdrawal not later than the second business day after the banking day on which the cash is deposited, if the deposit is not made in person to an employee of the depositary bank.
(b) Electronic payments–(1) In general. A bank shall make funds received for deposit in an account by an electronic payment available for withdrawal not later than the business day after the banking day on which the bank received the electronic payment.
(2) When an electronic payment is received. An electronic payment is received when the bank receiving the payment has received both–
(i) Payment in actually and finally collected funds; and
(ii) Information on the account and amount to be credited.
A bank receives an electronic payment only to the extent that the bank has received payment in actually and finally collected funds.
© Certain check deposits–(1) General rule. A depositary bank shall make funds deposited in an account by check available for withdrawal not later than the business day after the banking day on which the funds are deposited, in the case of–
(i) A check drawn on the Treasury of the United States and deposited in an account held by a payee of the check;
(ii) A U.S. Postal Service money order deposited--
(A) In an account held by a payee of the money order; and
(B) In person to an employee of the depositary bank.
(iii) A check drawn on a Federal Reserve Bank or Federal Home Loan Bank and deposited--
(A) In an account held by a payee of the check; and
(B) In person to an employee of the depositary bank;
(iv) A check drawn by a state or a unit of general local government and deposited--
(A) In an account held by a payee of the check;
(B) In a depositary bank located in the state that issued the check, or the same state as the unit of general local government that issued the check;
(C) In person to an employee of the depositary bank; and
(D) With a special deposit slip or deposit envelope, if such slip or envelope is required by the depositary bank under paragraph (c)(3) of this section.
(v) A cashier's, certified, or teller's check deposited--
(A) In an account held by a payee of the check;
(B) In person to an employee of the depositary bank; and
(C) With a special deposit slip or deposit envelope, if such slip or envelope is required by the depositary bank under paragraph (c)(3) of this section.
(vi) A check deposited in a branch of the depositary bank and drawn on the same or another branch of the same bank if both branches are located in the same state or the same check processing region; and,
(vii) The lesser of--
(A) $100, or
(B) The aggregate amount deposited on any one banking day to all accounts of the customer by check or checks not subject to next-day availability under paragraphs (c)(1) (i) through (vi) of this section.
(2) Checks not deposited in person. A depositary bank shall make funds deposited in an account by check or checks available for withdrawal not later than the second business day after the banking day on which funds are deposited, in the case of a check deposit described in and that meets the requirements of paragraphs (c)(1) (ii), (iii), (iv), and (v), of this section, except that it is not deposited in person to an employee of the depositary bank.
(3) Special deposit slip. (i) As a condition to making the funds available for withdrawal in accordance with this section, a depositary bank may require that a state or local government check or a cashier's, certified, or teller's check be deposited with a special deposit slip or deposit envelope that identifies the type of check.
(ii) If a depositary bank requires the use of a special deposit slip or deposit envelope, the bank must either provide the special deposit slip or deposit envelope to its customers or inform its customers how the slip or envelope may be prepared or obtained and make the slip or envelope reasonably available.And that’s some sparkling reading for the weekend!
(grin)
It’s so easy to fake cashier’s checks today, what with the availabiility of color copiers, paper, etc.
I’m in the coin biz. We sell gold coins for CASH. ONLY.
I can tell you stories of many a coin dealer who took cashier’s check for gold. The crook made the check in their van only moments before the transaction. And gold coins are just about like cash. They can be sold instantly for about 90-95% of their purchase price.
Actually, your mistake was not cashing the check first. By cashing it, you make the bank take the risk the check’s not good, but, with a cashier’s check, they’re usually more likely to take that risk. (Of course, if it were their own cashier’s check, they would have definitely cashed it for you.) Then, you’d be able to buy a new cashier’s check with the cash.
Once you deposited the check, however, they’re going to wait for the check to clear.
You could have also asked to see a manager who would have had the authority to authorized a cashiers check drawn against a check that hasn’t cleared yet.
Peace.
“I’d like that in wheat-back pennies and buffalo nickels, please.”
Hamsters! Damn them to hell!
OK, I was a bank teller for a few months back in college and I got caught in a cashiers check scam. I didn’t know what the problem was as no one had told me the proper procedures for handling cashier’s checks, so I didn’t get in trouble. But the person walked away from my booth with a cool $1,000 in cash. It involved opening two accounts at two different banks under a fake ID, getting a cashier’s check from one and depositing it at another, then drawing a new one from the second one and cashing it before the computers cycled and etc etc etc…
I think that they have installed new computer procedures to help against things like this, but 7 years ago it could happen.
-T
Not only can teller’s checks be forged, but the payer can stop payment on it (I recently had to do this when a check got lost in the mail). So the bank wants to make sure the money is transferred to them before it goes out.