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I own some commercial property with the mortgage held by the seller. Last year I noticed the payment was clearing my bank often 5-10 days before the seller deposited it. I have a good deal so if I pay earlier, the interest portion is less, principal is more. I pay every 20-25 days rather than every month. I also sent a small check to a friend to do some work for me. He held the check for over a year cause he hadn't made it by the property yet - no big deal. I'll be going back to school now and quitting work so I'll be going to pay every 30 days so I was considering sending 12 checks at once and telling the seller to just deposit one every month on a set date. Avoid the hassle of opening the letter, possibility of having one get lost, ripped, whatever.

So I find out: Bank of America deducts the balance from your checking account regardless if the check has been cashed or not. US Bank does not. I have an account with Umpqua Bank, same as the seller. I sent myself a $800, $1000, and $2000 all the same payee in the bill pay. The $800 I deposited last week, hasn't cleared yet. The $1000 and $2000 are sitting right here next to me, they've cleared already.

I think this is a pretty relevant thing for people to know. That BofA check is >1 year old and still hasn't been cashed. Maybe start a list of who does this and who doesn't?

Banks that DO DEDUCT your Billpay payment even though they haven't been cashed yet:
Bank of America
Umpqua Bank

Banks that DON'T DEDUCT your Billpay payment even though they haven't been cashed yet:
US Bank

Member Summary
Banks that DO DEDUCT your Billpay payment even though they haven't been cashed by payee yet:
Bank of America
Ally
Chase
Citibank
Endura FCU
First National Bank of Omaha
ING Direct
Umpqua Bank
TD Bank
Wachovia
Wells Fargo

Banks that DON'T DEDUCT your Billpay account until the check has been cashed by the payee:
Charter One
Citizen's
Fidelity
Danversbank
Incredible Bank
PNC
Presidential Bank
Schwab Bank
US Bank
USAA
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Bofa will deduct the funds immediately but will refund the billpay if the recipient doesn't cash the check for a few months

I did a test sending a check to a friend and after about two months uncashed bofa automatically put the funds back into my account

This was something that I was looking at while searching for a new checking account recently. Not a fan of the banks who take out money from account prior to it being cashed, but I assume it has something to do with the bill pay service they use. USAA uses checkfree and did not take out until cashed, Ally uses Yodlee and takes out on delivery date.

PNC does NOT deduct, just sends check and deduct when it is cleared. Do not have extensive experiance with that but so far 2 check for HOA fee went this way.

ETA: it is very nice when you have interest checking account and have to pay big amounts by check.

Chase takes it out immediately.

For payees that get a physical check, Wachovia deducts before the cash it, since they move all of those funds to a central account and actually cut the check with an account number on it other than your own.

Citibank takes it out immediately. National City (now PNC) takes it out when the check is cleared.

I actually appreciate this feature for the most part. Since I have a non-interest, free checking account w/ BofA, it makes no difference when they take the money, but it helps w/ the rare but not unheard of forgot-I-wrote-a-check-and-they-cashed-it-a-month-later-when-there-weren't-enough-funds situation

Citibank deducts immediately, but also shows whether its actually cleared or not. Don't know if others do the same.

gato said: I actually appreciate this feature for the most part. Since I have a non-interest, free checking account w/ BofA, it makes no difference when they take the money, but it helps w/ the rare but not unheard of forgot-I-wrote-a-check-and-they-cashed-it-a-month-later-when-there-weren't-enough-funds situation

It involves a little work and some might consider it old-fashioned, but maintaining a check register or spreadsheet also precludes that occurrence.

Both Wells Fargo and First National Bank of Omaha Bill Pay service pull the funds out of your account on the instructed payout date. At a later time, Wells Fargo will provide a link on the Bill Pay which reveals the actual cashed date.

With proper written permission, Wells Fargo will transfer funds regularly from your checking account to another Wells Fargo customer's account. I paid my folks back that way.

Your friend with the check in his pocket over a year old is holding a stale check. Did you write it or bill pay it? That one could be a problem when cashed.

Sending 12 checks at once may be ok, but has risks.
Theft by a third party.
Loss by the payee. Make very sure the payee knows how to contact you regardless of your arrangements.
His house could catch fire or storm damage.
His wife could deposit them all at once. This possibility has happened in real life. Despite post dating, the checks went thru and the check writer was overdrafted. All the negative ramifications applied.

I finally got some information on this from Umpqua bank. They deduct the funds on the pay date. They credit back the funds if the check has not cleared at 90 days: basically the bank gets a 90 day interest free loan if the check isn't cashed. If I want the funds to be available before that they said to deposit the check into an ATM to the account the check is written from.

You should have a third column - some banks withdraw thr funds when the check is sent, some withdraw it on the pay-by date, some withdraw it when the check is a cashed.

I dont know if they still do it this way, but BofA used to deduct on the pay-by date - even if the payee received and cashed the check early.

What about Alliant CU?

tjguitar85 said: What about Alliant CU?
Takes it out right away.



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