Do the small banks in malls/grocery stores/drug stores/etc. have to take everything (money, checks, etc.) to the main branch when they close for the day or is it usually kept at the small branch?
Planning a robbery?
Well, I don’t have any other plans for the weekend.
In store branches of the banks where I worked were completely self contained, with safes for the cash, multiple alarm systems, sensors and cameras everywhere, just like the free standing branches. To transport negotiable instruments back and forth everyday would be prohibitively expensive (think armored cars) and highly risky (moving valuables around at about the same time each day).
The general rule is that armored cars come and go to a branch in order to mantain the correct CIV (cash in vault) level. Too little and you risk a shortfall. Too much and to have excess cash that runs the risk of loss when there’s a robbery or a break-in. Only a programmed level of CIV is insured, you see.
The balance is actually more delicate than that. The first part is absolutely true - a branch never wants to run out of cash. Excess cash is no so much a robbery risk as it is an investment loss. Excess cash is kept in the safe and very, very few robbers bother to even try to go there. In fact, very few even hit more than one teller window. As a rule, they want in and out quickly.
Banks invest their excess cash overnight. Cash in the branch safes cannot be invested. Let’s say a bank can earn the completely made up sum of .025% on it’s overnight investments. On $1,000,000 that equals $2500. If said bank is a large one and has 100 branches, each with $10,000 more than necessary in their safe, the bank loses $25,000 that night, $125,000 that week. Multiply that by 52 weeks and they’re out $6,500,000 in bottom line profit for the year. Want to be a millionaire? Figure out a better algorithm that allows banks to keep on hand at each branch only exactly as much cash as needed each day.
^ Yes, forgot to mention it. Liquidity (and too much of it) are the primary determinants of CIV, not the amount to be insured.
There’re also limits of deposits to/from banks with counterparty agreements.