An accountant where I used to work was caught embezzling once- the old “went on vacation” story. He used to work at a bank, and knew the policy was that any cheque over $50,000 had to be personally verified by the manager with the cheque writer. The accounting department was on summer shutdown, and the cheque run was skipped for one week - so the bank manager came in one day to find two cheques for $40,000 to the same obscure consulting company. He called the cheque issuing company to verify the validity of a pair of cheques totalling $80,000 and much hilarity ensues.
(“I haven’t heard of that company, I don’t know what that cheque is for. It sounds like the sort of company Bob’s department would deal with. Ask Bob. You did? He Doesn’t know either?”)
So no real limit so much as a cover-your-ass verification policy before letting money leave the bank.
If you had a card reader/encoder device, like the ones they sell on ebay, you could probably work out the encoding yourself with a few example cards and gin up a card that was mostly valid, given the username/account number/expiration.
However, there are “cryptographic check digits” included. The thing is, I’ve read that hackers today do not need an image taken from a card reader. They can create a fake card that will swipe correctly with just the username/cardnumber/expiration data.
That’s kind of odd, actually. Surely the bank could pass that data through an encryption algorithm and generate some unique check bits that would be unique to any given user (and very difficult for the hackers to predict). The credit card readers used in stores would pass those bits along to the bank for authorization but would not store the data.
Reminds me of a short movie back in the 1950s where a fella writes a cheque for $10 and gives it to someone, who in turn endorses it to someone else … etc etc etc … and the cheque winds up in the original writers hand with the back full of ten twelve endorsements. He just ripped it up and end of movie.
This is a little off-topic, but I once wrote a cheque for one cent … $0.01 … to a political campaign. Not only did they waste money depositing the cheque, I got on the mailing list and gobbled up at least ten bucks worth of postage from them. Good guess folks, it was a congressman !!!
I can answer that, although this happened many years ago, probably 30 or more. I had a US$ account at a small bank somewhere in New England. I got it shortly after US banks had discovered the NOW (negotiable order of withdrawal) accounts that allowed them to get around the rule forbidding interest-bearing checking accounts.
A friend had a check for US$8000 that he was dubious about. It actually purported to be a certified check and I never did find out the whole story. So I sent it off to the bank, accompanied by a note saying that there was some doubt that the check was valid and I would make no attempt to use the money until it had cleared. Sure enough, I got a note from the bank a month later that it had been rejected. There was no penalty and I was astonished that I actually got a month’s interest on the 8K. I returned the check to my friend explaining that I actually got the interest. He explained that that check had, until it bounced, increased the bank’s capitalization by 8K and that they could lend more money based on that.
I had a relative that wrecked her checking account by spending her inheritance check too quickly. Her mom had left her a small amount. It was around 10k and the lawyers sent her a check after she turned 21. She deposited it and went on a spending spree the next day. I never did learn what she bought. I know she bought a washer/dryer and some furniture. She shopped at several stores. Every check bounced.
Young and dumb for sure. But it was a certified check issued by a large law firm. The bank still put a hold on the funds.
The technicalities of paying large sums of money are fascinating. I watched a documentary about the sale and delivery of a newly manufactured Boeing airplane to a European airline. There were delegations from Boeing and from the airline sitting in a conference room. One executive was in constant contact with the bank and everybody was watching him. Once he received the confirmation that the payment had been made, the airline people (including pilots) were free to leave and to take the plane to Europe. I wonder if anybody really feared that there was even a slight risk/suspicion that the airline executives wouldn’t pay up and take off (so to speak) with the plane.
That’s not a very tough question. The robber baron’s name is clearly Joe Blow. Says so right in your question.
Semi-related story. Back when I still had all my typesetting and printing equipment, I have a set of matrices for casting the MICR type. Also had the guidebook on how to verify that it was printed correctly, so in theory I could have letterpress printed my own checks. I had planned to do that for a while and then idea just faded. I now write about five checks a year, so the level of effort compared to the novelty factor was too high.
Sicks Ate is correct. FDIC currently insures individual depositors up to $250,000. cite
Note that this is not an account limit. You can deposit as much as you want into a checking account (subject to the concerns expressed elsewhere in the thread). Any amounts over $250k won’t be covered by FDIC though.
I was a bank teller back in the '90s when the limit was only $100k (it switched in 2008). We had customers who were extremely concerned about FDIC insurance who would buy long-term CDs for $100k, and have checks cut to them every month so that the interest wouldn’t put them over the FDIC limit. Other customers though, didn’t care about FDIC insurance and would have $200-300k in a saving account. (Side note: in retrospect, who was buying 5.5% CDs for $100k back in the late '90s? Crazy people, that’s who.)
That’s the other point. Who keeps a vast amount of money in a low-interest chequing account? I suppose that opens up a whole new discussion thread about money management of the rich and famous, or large corporations - at a certain point there’s enough money to be made that it’s profitable to hire someone (or some company) to shift your assets around so they generate decent income, but also free themselves up in sufficient quantity to pay the day-to-day bills.
I suppose the real upper limit is - what’s the biggest number the bank computer system can process?
This, but not in that exact way. First, the time period/amount depends on if the bank is national/local, out of state, or even out of country, with more restrictions further on, but: the bank officer is given some leeway to make it more strict, but it isn’t absolute. They can’t pick a random date to hold it to, but may choose between releasing it sooner or later based upon the client’s account history.
I don’t remember the exact values, but they have to inform you in writing (receipt should have the info) the exact terms. $100 is freed up immediately/next day. Then $5000 (IIRC that means total, so the next $4900) within X days, the remainder further on. I don’t think that there is another intermediate step, and whether the check is officially cleared or not is beyond the immediate bank officer’s control. The computer makes the
FDIC is $250k, but I personally wouldn’t be too concerned about BofA going into default/another Great Depression in one month!
No cite, but I think I’ve read: you won’t see any interest. The fee will likely be the same as if the check were much smaller.
Yes, pretty rare, at least at the consumer level, and banks have differing policy on how to treat them.
The movie “Catch Me If You Can” was based on the real life story of a con man who actually pulled of some of those exploits. Recall one of the tricks in the movie is that he prints cheques with altered routing numbers. When they are deposited, the rudimentary computer clearing hosue system sends the cheques across country (despite what the face says), so there’s a transit delay of several weeks before they bounce and are denied. By then he’s long gone.
We are getting a bit off track here, but a bank account can be FDIC insured for more than $250,000. The explaination lies in this sentence from your cite:
Underlining mine. The easiest example is a joint account. If my wife and I are joint owners of a checking account, we are each covered up to the FDIC maximum of $250,000, making the maximum insured account value $500,000.