Many banks are even smarter than this. They sort debits by decreasing size before processing. Thus, if you have a $100 balance and write nine $10 checks and a $200 check, they can collect ten overdraft charges, not just one.
Since we’re already in BBQ Pit, I’ll hijack slightly to point out that this phenomenon is related to today’s bad service and extra charges on airlines, etc. The common thread is price comparison and “effiiciency.” With consumers always seeking the smallest base price, providers find other ways to get revenue.
I’m no longer in a situation where that’s a problem for me, but I got nailed for that with Chase back in 2003. I deposited a check for, say $100, on Friday. All of that money was reported in my “available balance.” Being younger and not quite as wary of banks, I made four transactions that weekend, trusting the balances reported on the receipts as being true status reports of my account. Since everything didn’t get accounted for until Monday (even though they had computer records and I had receipts showing my “available balance”) the order went -> large withdrawal to smallest withdrawl, then deposit. So, instead of being in the clear for my weekend spending, even though chronologically my withdrawals were on the days after my deposit, I got nailed with four overdraft charges @ $35 each, and a final balance in the red, instead of the positive amount I was expecting. After much arguing with the teller and then the manager, they only refunded half my money.
While it doesn’t help me now, I’m glad the rules have changed.
I heard somewhere that every pound in an account can be lent out five times over, or something similar, so yes, you’re contributing to their pot against which they can advance interest-bearing loans. Personally I was impressed by a letter I got from my bank that informed me that my £350 overdraft limit, which I’d got nowhere near using for years, was being summarily reduced to £50. Looks like they were going to have to increase their fees somehow…
Something like this happened to me a couple weeks ago. My girlfriend and I use the same bank but separate accounts, and she had written me a check for $300. I deposited it on Monday, and it showed the funds coming out of her account by Tuesday morning, but the money didn’t show in MY account until Thursday. Where was that $300 hiding out for those two days? It’s not like anyone had to physically transfer $300 in cash.
We have separate accounts at a credit union that allows us to do electronic transfers between accounts on the web interface. It’s just a profile setting identifying authorized accounts. That type transaction is instantaneous, sans all the attendant rigmarole that goes along with paper. They have those delay policies in place for good reason. Nobody’s paying enough attention or even cares to see you happen to have accounts at the same bank. All they care about is to not invoke the slightest risk of losing a single dime.
They got my son on this one. He would have even had enough funds except that they were holding a deposit from me for 5 days. The money was in his account but “unavailable.” The bank manager said to me “Mr Shiftless, don’t you think it’s overreacting to close your [substantial] account with us over this?” Different banks have different policies and it’s worth checking them out.
I am not a banker, but it is quite possible that the cheque is being processed though a central clearing house operation which processes all payments the same way and with the same time delays whether they involve accounts in two separate banks or in the same branch of a single bank. A “no shortcuts” process would add redundant steps for some payments but would simplify the overall process and reduce the opportunity for error. (The reduction in interest payouts and possible added overdraft fees due to the added processing time would be incidental to this, even if welcomed by the bank as additional revenue.)
I hate to sound like a conspiracy theorist here, but the bank was using your money for free. Two days of not paying a minuscule amount of interest doesn’t seem like a lot, but it can add up with hundreds of thousands of customers over a year.
It honestly sounds like more of a fuck up on the banks part. It should have been processed as an “on us” transaction and given immediate credit, same as a cash deposit. Next day I would have been on the phone with the branch manager asking wtf was going on and getting credit in the account.
You realize, don’t you, that your banker may well be reading this? Heartbroken.
Go to your banks website, you don’t think they love you! Just go, and what do you see? Shiny, happy people, in airy, suburban kitchens serving dinner to well-scrubbed, intelligent and respectful children! Secure in the knowledge that the Wesayso Bank is watching over them, their pensions secure in Lehman Bros, fully backed by insurance from AIG. Snug security.
And all manner of assistance is available! Brochures on fiscal responsibility by the dozen, various others full of wise, avuncular advice. Look at all that, and tell me your banker is not your very very best friend!
And for what? A life of service to the community, that’s what! Not the meager compensation, hardly worth mentioning. No, really, I’m not trying to make you feel guilty here, so I won’t tell you what a pittance… That would be wrong. Enough to say that if you knew, you’d run right down to the bank and just give them an extra $50 or so. And apologize. They’d call security, sure, but only because…they care!
It’s not amazing - it’s common sense. (For those items which still have a 10-day clearance periods) they need to make sure that they negotiable instrument is properly payable before they give you the money.
I know one of the national banks (Chase, I believe), has been advertising the ability to deposit checks via a mobile phone app. I don’t think the phone company or other utility is going to start processing their customers’ checks with a mobile phone.
On the other hand, the OP’s HVAC tech is just the person I would expect to start using this service. If I ran a small business, especially one that is done out of your truck and involves driving all over, from one customer to the next, I’d be quite happy about not having to take my deposits to the bank. Not to mention getting instantaneous credit in my own account. I’d be tripping over myself to start using the new capability.
(For those items which still have a 10-day clearance periods) they need to make sure that they negotiable instrument is properly payable before they give you the money.