I have a question regarding the accessibility of funds after depositing a check. Now before anyone says anything, I have written about a similar issue a while back. My question today has nothing to do with check dates but rather the discrepancy between ATM policies and person-to-person transactions. This is also re a different financial institution from that of my other OP.
Now let me say this is nothing that currently affects me, I have direct deposit. This is simply a curiosity to me that I hope can be satisfied here. Let’s say I deposit the same check into the same bank consistently. For convenience sake, I like to deposit it thru the ATM. Once I’ve deposited the check (for any amount up to $5000) I have instant access to 100% of those funds.
Now let’s say that at the time of my last check arriving I was temporarily without an ATM card. This would necessitate me making a deposit person-to-person with a teller (either inside the bank or thru the drive up lanes). This same check that has been being deposited every single month for years is now being “held” for 3 days before I can access the funds. My question is, why?
The answer from my financial institution is that it’s a security feature, as checks are associated with high levels of fraud. Ok, I can understand that. However, why in the world isn’t the ATM configured with the same policy? I mean, if security really is the paramount issue here, then why on earth would they allow such security features to be bypassed so easily? Having the ATM available for instant deposits seems to undercut the “3 day hold” policy to prevent fraud. Someone with an account and an atm card’, if denied instant access to funds at the counter, could simply go outside and deposit it in the ATM and get their cash.
I feel like there is something here I’m just not understanding but for the life of me I can’t figure it out.
i have had that same question. i even asked a teller once and her answer was “(shrug) i dunno, thats our policy”
since this is the first response i’ll keep my cynical jab at the banking industry to myself (for now), but add a question of my own.
i had been sending my rent check to my landlords bank for over 2 years; same branch, same payee name, same payor name, same guarantor bank, same amount, same everything, and landlord had only one acct at that branch. . .check even had my phone number on it.
once i forgot to put my landlord’s acct number on the back of the check, and they had no idea what to do with it. it sat on a bankers desk for 2 weeks until i called to check on it when my landlord asked me where the rent was. when i finally got a hold of the banker who knew where the check was (3 other bankers had no idea what happened to the check but there was a log of them recieving it in the mail)i asked why they didnt deposit it, he said they had no policy to deal with the situation; theyre not allowed to deposit a check in an acct without an acct number even if they could easily figure out where it should go. . i pointed out that my phone number was on the check and he said that they probably would have called me eventually.
come on! this is someones money! dont sit on it for 2 weeks without doing something to find out where it belongs. if the shoe was on the other foot you can bet the bank would be charging all kinds of late fees and penalties.
At my bank in Canada, their policy is slightly different - teller deposited cheques (including, certified cheques, bank drafts and personal cheques) are held for 4 days, while ATM deposited ones are held for 5 days.
To me the bigger questions is how do they justify any hold at all? The bank’s computers can talk instantly to each other, they know within milliseconds if the money is there.
As Watchwolf says - the only answer is a cynical jab - because they can and because the government allows them do it.
As a side note - a few years ago I moved cities and was transferring my account from one branch of the same bank to another (Bank of Montreal). This was before the branches had systems that tied them together. My branch gave me a certified cheque for the amount of my balance (maybe $3,000) but the new branch told me they were putting a 7 day hold on it. WTF? “Sorry that’s our policy, all new accounts opened with any cheque are put on hold for 7 days” - even if you have a certified cheque from one of our own branches!?! I took my cheque and walked out, went to a different bank who opened an account with no hold. Never banked at BofM again.
so here’s my guess; i believe banks dont do anything unless it somehow makes them money!
they had to be forced to put a stop to the float (after taking money out of one acct; delaying putting it in a different acct) by fed law. GMANCANADA, what BoM did in your case would only now be legal, in us, if they credited those 7 day toward any interest you might earn.
most, if not all, atm’s are operated through independent companies, even the ones in the bank lobby. so they must earn money, somehow, by allowing you access to your money thru atm and that mitigates the risk they might be exposed to by check fraud. or theyre somehow out of the liability loop once the atm has the check.
and, watchwolf49, my cynical jab is that theyre not just thieves but cowardly ones. not only will they try to take as much of your money as they can, they’ll do whatever they think they can get away with so as not to incur any risk. even tho banking regulations and interest rates already do that.
A bank is a collection of different systems. For branding and marketing purposes, they like to look like just one bank that does everything for you, but under the covers, your savings account may be run by a bunch of middle aged women, paper records, and a virtual emulation of the computer they had 50 years ago. The ATM may still be running OS2. And the Internet banking may all be printed out every night, and typed into the IBM mainframe supported by a computer support company in India.
Each service may be individually upgraded, or they may have a 3 year plan to consolidate it all onto a new single platform – because last time they tried that, in 2011, the project exploded in a ball of cost over-runs and requirement failures.
Also, banks look at “security” is a different way than you do. To a bank, “security” means conforming to banking regulations designed to stop the bank unexpectedly going bust. These regulations aren’t really designed to stop people stealing from you: they are designed to stop people stealing from the bank. Because if enough of that happened, the bank would go bust.
Lots of misconceptions here. The length of hold time is federally established (in the US, can’t comment of Canada et al.), and they may institute a hold for some of the funds depending on factors like if it is out of character. What I suspect that the OP encountered was that ATMs use more objective criteria, while tellers can put a hold based on reasonable risk. I don’t know if the OP is establishing this based on multiple transactions or just a few, but possibly the teller window is too strict and should be accepting these as standard transactions, or else the ATM may or may not consistently do the same thing.
mikecurtis’ experience sounds like a colossal bank screw up, but (hopefully) is not the norm for that bank. Especially since if there is any “sitting on a desk,” it should be in the central office, not where the deposit was made.
And yes, banks are in the business to make money, and use fees to do so. But there are certain standards that they have to adhere to and any delay as in the OP’s experience is not necessary malfeasance.
I don’t believe that there’s a 3 day delay but if the OP put the deposit in after the cutoff time (e.g. 4pm at some banks), then it’s considered the next day and 2 business days become 3. As to why banks even bother with cutoff times and closed weekends and such, there is no good answer except that that’s what they’ve always done.
ETA: I won’t zombify the other thread in the OP but I read it and it’s a similar issue except that one should be much more obvious, shouldn’t it? Customers sometimes get irate because you won’t let them do that, but the person who wrote the check will also get mad if you cash it before the date, and the latter is a potentially greater risk.
There is a fairly common fraud that happens over here because cheques deposited at the bank (ATM or teller - makes no difference) are accessible in 24 hours.
I advertise my car for £3,000 and someone says that to get round some problem with his bank, he wants to give me a cheque for £6,000 and I can give him £2,500 back in cash.
Now I am no fool, but he says he will give me the cheque in advance and collect my car and the money three days later, when the cheque has cleared.
Once I see on the internet that the cash is in my account, I draw the £2,500 and hand it to him with the keys and documents for the car, happy that I not only sold it for the asking price, but made a £500 profit into the bargain.
A week later, I get a letter from my bank saying that the cheque failed to clear and they have taken the money back. I phone my insurance company and say my car was stolen, and they say “Hard luck; you gave the thief the keys etc so it’s your fault,” and refuse to pay out.
Cite?
Every bank I ever worked for either owned and operated their own machines or contracted out the operation for them. The machines were part of the banks infrastructure and systems. None of the banks branded an independently owned and operated machine.
The network in between may be different depending on location.
At a regular own-building or office building bank branch, the network would be bank operated and it connects back to head office.
At a large shopping centre, where an ATM is on its own, it may be an ATM/card network provider who makes it cheaper to use the network than for the bank to install their own.
For any ATM’s that can be used with any banks card, then the ATM must be connected to the card network … somehow. So the card network can also contain the bank’s own branded ATM’s.
<banks branches,banks ATM’s> <banks network > < Banks HQ > < card network > < ATM’s of all brands, including banks own ATM’s>
I’m still on paper paychecks, written from my company’s account at Chase Bank. I also have a checking account at Chase Bank.
If I take my paycheck to the teller to deposit it, the funds are almost always all immediately available. Once in a great while, all but a couple hundred bucks are immediately available.
If I use an ATM at the same branch to deposit my check, I get access to, at best, $200 (of my roughly $2000 check) immediately, and the rest is on hold for at least three business days if not a week or more.
They’re constantly trying to get me to use the ATM to deposit my check instead of me waiting in line for a teller. And every time, I tell them what I’ve just told you, they tell me that’s simply not possible, that isn’t how it works. And the first couple of times, I believed them, deposited my check in the ATM, and then got a hold put on the funds. So then I told them, no, I’m not doing that again unless you’re there watching and can cancel the transaction for me so I can deposit it at the window. The bank manager did indeed stand next to me, but the point in the process where it told us the ATM was holding my funds was “too late” for him to cancel it. Grr… :mad:
You should automatically treat anything that involves someone writing a check for more than the transaction and you giving them cash back as a scam. It’s doubtful you’ll miss any good opportunities, and there are tons of scams based on this idea.
and. . . i have a friend who works for atmmachine.com. i called him today and apparently i was conflating 2 different types of atms. there’s the stand alone, cash only types of machines: these are all privately owned. and there’s the multi function machines, where you can do types of banking other than just cash withdrawal. this second type of machine usually has a bank brand on it. while the machine itself may
be owned and operated by an independent company; anything deposited into the machine is owned by the bank. i assumed the operating company acted as a clearing house for the contents as well. my mistake.
so i’ll just slowly back away from the thread, and hope i cause no more damage.
