My income comes via PayPal (don’t ask) each week on Monday. I then transfer it to my bank, and the money is there on Thursday. Dopers in culturally Christian nations can immediately see how this is going to be a problem for me next week.
Since the transferring is all done electronically with (I’m assuming) zero human input other than my own, does that mean that the money should still be credited to my account by Thursday? Or will I need to wait until Friday?
I don’t know how it works in Missouri, but in the UK, the bank is shut and the money stays in limbo somewhere, probably earning interest for the bank. They are shut on the 25th and the 26th. If I draw cash from an ATM though, it is debited from my account straight away. Since you do the transfer on Monday, it may well show up in your account by Wednesday evening.
Every employer I have ever worked for paid early at Christmas to avoid these problems. I an curious about the PayPal business though.
I do writing for a website. I’m not actually an employee so much as an independent contractor. They pay through PayPal rather than directly into my bank, as an employer would do.
US banks don’t transfer money on holidays or weekends. There is no logical reason for this other than just inertia from the past. A lot of banks are open on Saturday now and my credit union is open Sat. and Sun.
They certainly have no trouble with debit or credit card use every day of the year so they have staff that work 365 days 24/7 in case of problems.
Just because a retail branch of a bank is open, does not mean that the cash management people in the back office are on duty. Yes, you can use your credit/debit card 24/7, but that doesn’t mean that any money changes hands between banks immediately. Settlement occurs on a business day.
Despite the videos you may have seen on youtube, banks can’t just magically pay each other by creating accounts and making bookkeeping entries. They actually have to scrounge up what are called “fed funds” to trade between each other. Inter-bank transactions like checks and ACH transfers settle at certain times of the day. Someone has to make sure that there is enough money in the bank’s settlement account at the clearing house to pay for any net outflow. And they don’t want to keep excess funds idle in their settlement accounts. This is the job of the bank’s cash management department. If they see that tomorrow morning’s settlement is going to require a net payment of $10 million, they have to make sure there is $10 million in fed funds in the settlement account. They may have to shuffle money around between accounts or they may have to borrow fed funds from other banks. This doesn’t happen by magic.
If the transfer from your Paypal account to your bank account is done via ACH (and I believe it is) it might be there on Thurs. My educated guess is that if your money is available on Thurs then what is happening is that the money actually arrives on Wednesday, which is a banking day this week, with your bank’s policy being that the money will be available for withdrawal the following day which, in my experience, does not need to be a banking day.
I move at least 5 figures monthly through Paypal (ask away, pretty standard way of doing business these days). If I really need money in my bank, I just use the debit card and then deposit in the bank= 0-1 business days. There are some fee-free ATMs in my area, and I think I can take out up to $800 per day. I’ve also POS debited (buy anything with a PIN at POS, usually self-checkout for me, and get cash back) several hundred in any given day. A very typical trip for me: Go to ATM at the grocery store gas station, take out $400. Go through bank ATM drive through. Deposit. Credited immediately or $100-200 then and the rest tomorrow.
Mine usually takes 2 business days for the bank transfer. It doesn’t move on holidays.
[ul]
[li]Money transfers operate under FedWire. When the Fed is closed so are money transfers.[/li][li] The big banks don’t want to operate 24/7 and vetoed any attempt to run 24/7.[/li][/ul]
That is exactly what I’ve experienced when I got my salary via Direct Deposit. So this year, I expect the OP to have no problem because the banks are open on Wednesday. But suppose Xmas was on Wednesday, like last year? I don’t know what happens in that situation.
It’s a common misunderstanding, but a misunderstanding nonetheless, that interbank transfers of payments made by clients - either by check or by direct transfer - take place via Fedwire. They don’t; Fedwire is a real-time (meaning that funds are transferred immediately) gross (meaning that a transferred sum is transferred from one bank’s account to another without being netted against another payment in the opposite direction) settlement system. Its fee structure is such that the price of a Fedwire payment would be disproportionately high for small amounts, and as a consequence it is used for wholesale purposes, i.e. large amounts per transactions, only. Small payments made by customers take place via a clearinghouse, which is a system that nets a large number of incoming and outgoing payments made by a bank over the course of a period, such as a day; only the remaining balance is then transferred, which can take place via Fedwire but doesn’t necessarily have to (it could also take place via a correspondence account, for instance, which is a bank account which one bank keeps at another). The Federal Reserve System is one operator of such retail, small-amount clearinghouse systems, but there are also private sector enterprises which operate similar systems.