My co-workers and I have noticed some differences, and I just wanted to check with the more knowledgeable folks here.
I can deposit a check into my checking account on a Monday, have the first $100 available on Tuesday, and the rest of the check - up to $3,000, in my experience - available by Wednesday. In contrast, our company deposits a check (in a different bank) on a Monday, has the first $1,000 clear on the second day, but may not have the rest of the funds fully available for another 3-10 business days, i.e., the check clears incrementally. Company deposits can be anywhere between $4,000 and $50,000.
Are these differences a function of the amount of funds involved? Individual bank practices? Some federal regulations? If it’s purely a matter of bank policy we’d obviously like to shop around for a bank that clears checks more quickly… no fun having a paycheck delayed because funds haven’t cleared yet.
In the USA, the FDIC’s regulation CC http://www.fdic.gov/regulations/laws/rules/6500-3210.htmlgoverns deposit availability. Subpart B is particularly relevant. It’s pretty restrictive on what banks can do. The regs don’t distinguish between consumer and business accounts.
But within the limits of the rules, banks are free to set their own policies, and often do. And, frankly, they’ve been known to routinely make use of the exception provisions to extend holds beyond the intent of the regulation. And yes, banks often handle business accounts differently from consumer accounts on the assumption that businesses are less likely to engage in check fraud. Businesses get a break while (some) consumers are held to the letter of the law.
I used to own a business that received a single check for $100,000 or so each week. That was our only revenue. We then wrote checks parcelling it out to a lot of clients, keeping a little as our actual income. Since we’d grown the business with our bank and knew everyone from the CEO to the janitor, they were used to this strange pattern of a huge deposit followed immediately by a flurry of checks week after week after week.
Then our bank got bought by HugeBanCorp. They slapped a 2-week hold on our deposits every week, and our clients damn near killed us. That meant zero cashflow for them for two weeks. I had to threaten to sue to get them to ease up. They still wouldn’t go for anything less than a one-week hold, so we changed banks to another locally-owned small bank and got rid of the hold problem.
So it pays for you to shop around.
Don’t forget that credit unions are also available; they offer the same cheecking account features and are often more consumer-friendly than Consolidated Universal Megabank down the street.
I would add that banks treat consumers differently from eachother, and the same for businesses. Some customers get basically instant credit on their deposits. Ditto for certain businesses.
