About a year ago the bank in my small town (Wisconsin if it matters) got bought out by a larger regional bank.
The regional bank changed some policies like I expected, one of which is “guaranteed immediate availability of funds if deposited before 3:00pm”
Fair enough, however I don’t think I have ever had immediate availability of my funds whether I deposit at 2pm or 8am. In fact when my business deposits CASH I can kiss that money goodbye for 48 hours before it is available.
My WAG is no matter when I deposit it, the teller needs to deposit their stack before 3:00pm which never happens.
I can’t tell you how many checks I have bounced because of this policy. If a check hits before the deposit takes effect they reject it and penalize me $32 even though the money is actually in my account.
Can I fine my bank for not sticking to their deposit promise?
You may have a common misunderstanding of how banks work, which is on the “business day” - far more strictly than most businesses.
A bank’s business day is from either midnight or opening time, on a day they open, until “closing time” - traditionally 3:00 pm, sometimes still 6:00 pm on Fridays.
Banks that are open Saturday or Sunday or after nominal closing time are doing so as a customer convenience - but that doesn’t change their internal organization. For most banks, “closing time” is the end of that business day. A deposit made at 3:01 via a drive-up, walkup window or ATM (or even sometimes inside windows), and any deposit made on Saturday, Sunday or a bank holiday is being made on the following business day.
So your 4:00 pm deposit on Friday might as well be being made on Monday morning, and won’t be fully registered until Monday’s business is closed. Your ATM deposit at 6:00 on Tuesday won’t be fully settled until Thursday morning.
That said, many banks, especially smaller ones and specially-specially smaller banks gobbled up by slightly larger ones (been through it twice over in the last three years, sigh) will impose much stricter deposit rules in place of laxer small-bank ones, and one of those is being very strict about not crediting deposits until the next business day, no matter how much marketing booshwah says “immediately.”
Yes it does. Although the systems have gotten more streamlined, and some bigger banks actually have streamlined procedures, many - mostly smaller ones - still run on a sort of quill-pen and register-book sort of mindset. A deposit is a deposit, be it rubber checks or cold hard cash, and it will be processed and added to the general accounting system in due time, good sir. In due time.
There is still a “batch processing” mindset and operation in banking, where individual transactions are queued and then processed in a bulk pass. It is only a simulation of realtime; the teller saying your deposit is “available now” means only that a memo has been stuck on your account, not that the funds are absolutely, 100% “there.” Cashing a check or honoring an ATM withdrawal later that day on those funds is a courtesy, not an accounting absolute, and every bank handles it a little differently.
Probably a slight disconnect between the actual internal accounting and the accounting you can access through an ATM, phone system or online lookup. The deposit is properly registered within the business day (has to be, by law and regulation, many of them, and banks are terribly fearful of getting gigged on small violations)… but the customer-accessible system might be notified more slowly.
Change banks. Sounds like yours is at the drag-end of old skool wayz.
But wasn’t there a change in the law based on BofA’s abuse of this system where a deposit that business day had to be credited to an account before any debits from that day were taken from the account?
There was a class action suit against Bank of America for debiting large transactions before small ones without regard to chronological order to maximize the number of overdraft fees charged. They agreed not to do it anymore as part of the settlement. Is that what you’re thinking of?
If your account isn’t being handled in the manner it is supposed to be you should speak with your bank manager. It sounds like this has been going on for some time and you should have questioned it a long time ago. The bank should reverse the NSF charges back to a period of time, within reason, maybe a month or two if they are at fault.
That doesn’t sound right, but how do you deposit? Through the teller window, through an ATM, through the mail slot? My experience is with major banks but the first two scenarios should be immediate. Doubly so if the ATM is envelope-free. The third one might not be but you should not expect it. If it is a smaller bank their ACH might be primitive. Also it should be credits before debits, but we all know how banks are supposed to work != always how they actually work. As Really Not All That Bright says, structuring debits by size is a different issue.
For check deposits (not sure how universal?), the first $100 is often available immediately.
Federal Regulation “CC” covers funds availability. In regards to cash, it says this:
Cash deposited at 8am on Monday, at the bank, in person, to bank employee must be made available to you no later than bank opening on Tuesday (barring holidays). The link is to an FRB page aimed at banking institutions. If your bank is not in compliance, print off the site and have a discussion with the manager. If they continue to violate the availability regs, report them to the FRB (or OCC in the case of state chartered banks).
Why do deposits take a full business day (or more) to be credited to your account, but debits (and associated fees or penalties) are taken out immediately? Seems like a double standard any way you look at it. Is this just another ruse to maximize overdraft fees?
While I am no fan of banks, especially the large ones we have now, I can understand a delay in crediting a deposit. Unless it’s in cash, which I think should be available immediately, the bank has to be assured that a check is good before just handing out the money.
Yes, if you make a deposit after the cutoff, it is credited the next business day. But a debit should not have any associated fees go through until the next day either.
There are two separate issues here. Sometimes a check is not good, but the bank honors it because they can’t hold on to it any longer. Sometimes they get burned, but 99% of the time it’s the best decision. This is becoming less common as kiting gets harder. But assuming no outright fraud, if there are some red flags (e.g. new account, large or out-of-habit deposit, customer has poor financial record, often combined with out of state check) the bank can opt to put a hold on it. But, they have to a) abide to specific length guidelines depending on these factors, and b) inform the customer (written) that they are putting a hold on it and the date and amounts when the funds get released. This should be federal law.
Take it easy. Read your account agreement; you’ve probably agreed to stricter timelines than you’ve been subject to. If teller cash deposits aren’t available the next business day, that’s fucked up, but honestly I’m skeptical.
I know it sounds crazy, but have you considered going in there and talking to them about it? If it’s not 4:45 or lunch rush, they’ll talk to you all day. I work at a bank, and I can tell you we’re very accommodating on every reasonable request. Some customers need and get a lot of attention and exceptions to practices. Some customers just get cash at the ATM and never talk to us and never tell us there’s a problem. In which case, guess what? We don’t know if there’s a problem.
Failing that, there are plenty of banks and credit unions in town. One of them will be nice to you.
Technically, debits are not taken out of your account immediately. For electronic debits (ATM, point of sale, at teller window, etc) a “hold” is placed on the account in the amount of the transaction. That hold reduces your available balance, but does not decrease the “book” balance. This is not new, banks have always done this when cashing a check at the teller window. They gave you the money, they want to make sure you don’t spend it twice. Writing a check does not affect your available balance until it gets to the bank. The new part is that with more and more electronic transactions taking place the bank knows about the debit almost immediately. It’s a done deal once you use the ATM, POS, etc, so the bank holds those funds to help guard against overdraft (not because they love you, but because they don’t want to take a chance on losing the money if you don’t make the OD good).
Credits, OTOH, are a bit different. With rare exception, teller machines at banks do not update accounts (some credit unions do). Trust me, most of the time you want it that way. If you make a deposit at a teller window a ‘memo’ appears on your account that shows a deposit has been made. The memo does not increase your available or book balance. It only serves as information for the bank. A possible exception is the electronic deposit of cash through a newer ATM with a built in cash counter. Those often increase your available balance in the same manner an electronic debit lowers your available balance.
All book balance updating is done by nightly batch processing, as noted above. Electronic debits and credits update the batch file when they occur. Paper credits and debits (checks, cash, etc) go through the bank’s “proof” process where they are digitized and added to the batch file. Once all the day’s work has been added to the file, the batch updates balance on the main file.
Did you get a little booklet stating all the terms and conditions of your account? Most of my bank accounts have come with one. Did you read it from cover to cover?
Did you still want to put your money in that bank? If yes, then you didn’t really read the booklet very carefully, did you?
The booklet consists of an encyclopedic catalog of ways that they don’t really promise of protect and care for your money; lots of examples of ways they might screw up and lose your money, in all of which cases you lose, not the bank.
The bank will state, explicitly, that they may pay a post-dated check, or a stale-dated check, or an overdrawn check (whether you agreed to it or not), or maybe even an outrightly forged check, and you agree to take the loss.
The list of ways they might lose your money, at your expense, goes on and on and on. I’ve seen these booklets from several accounts I’ve had at several banks.
