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Like a lot of people, I use my checking account to primarily deposit/withdraw money. Significant deposit find their way from checking into places like ING. I'm continually frustrated by check hold policy of banks. Take for instance the typical 5-day hold on a $10k check. At 3% that it could be making if it were at ING (vs the lousy checking account interest rate), you lose about $5 in interest due to the hold. And this adds up, every time you deposit a check.

Thanks to Check21, this got even more lucrative for banks. They can clear the checks electronically, while imposing pony-express era hold times!

I was wondering what banks have reasonable check hold policies? To keep thing standard, let's assume:
- depositing a regular check (not from government etc)
- check made out on a different bank than the recipient's bank
- account has been open for a while
- hasn't been overdrawn in the recent past
- no checks deposited in recent past have bounced
- check made out to the account holders name
- depositing an "out of state" check

The summary of data collected from posts appears below. Please feel free to add more information. Also, I'll periodically gather info from the thread posts to keep summary up to date.

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alladin880 said: <blockquote><hr>Try getting an overdraft account. Most banks will give you next day funds availability... (more)

dweick (Aug. 16, 2005 @ 5:56p) |

RE: CapitalOne<br><br>Reg CC funds availability doesn't cover savings account, money market accounts, etc.

dweick (Aug. 16, 2005 @ 6:00p) |

dweick said: <blockquote><hr>RE: CapitalOne<br><br>Reg CC funds availability doesn't cover savings account, money market... (more)

mikeres (Aug. 16, 2005 @ 7:42p) |

Below is a summary of various people's experiences and bank policies. Please feel free to add to this. By and large, it appears that most banks' written policy is same as the the maximum allowable hold by regulations. It looks like some banks are more flexible than others.

Absolute maximum allowed by regulations (thanks pantoot)
- 1 additional business day for "on-us" checks
- 5 additional business days for local checks
- 6 additional business days for non-local checks.
- A non-local check over 5,000 can be held for 11 business days.
- If a special hold is placed on funds
* $100 can be made available on the next day
* $4,900 can be made available on the 5th day
* Remainder will be made available on the 11th day.

Bank of America (thanks scanchain)
- Up to 11 business days
- May hold beyond allowed times? (see chienandalou, ciba posts below)

Citibank EZ Checking (thanks scanchain)
- Officially: 5 business days of amount more than $5k
- May be as soon as next day (Good Customer Program?)
- Has Check-As-Cash program

Commerce Bank (thanks Thrilla)
- Next banking day availability of up to $5000
- Rest possibly subject to 2-5 day hold
- Banking day ends at 6PM
- Nobody yet has reported being able to get hold rules relaxed

National City (thanks computerquest)
- 9 day holds
- Flexible

Netbank (thanks gatzdon, gheldean)
- Non-netbank ATM deposits (cash or check) - Fifth business day
- 9 business days for amount over $5k (even ACH!)

Pentagon Federal Credit Union (thanks TheBigDon)
- Trust In You - most amount is available right away

Presidential Bank
- Checks above $5k, 9 day hold on amount in excess of $5k

US Bank
- Up to 9 business day hold (with written notice) on >$5k checks (typically 5 days, no notice)
- ATM check deposit after 6pm starts the hold clock on the next business day
- Nobody yet has reported being able to get hold rules relaxed
- Depositing large checks in ATM eliminates tellers' discretion in reducing hold times

USAA (thanks bill777)
- 9+ days
- Online amount may not correctly show hold

Washington Mutual (thanks fiatlux03, MrCap, silentak2)
- Checks drawn on WAMU: No Hold
- Local: <5k = 2 business days, >5k = 7 business days
- Non-Local: <5k = 5 business days, >5k = 11 business days
- Shorter holds reported (1 Week hold for >5k, immediate for <5k)

Wells Fargo (thanks amitkurich, george2001)
- Upto 11 business days for amounts higher than 5k
- Teller can/may waive hold entirely
- Bank Manager may setup account to entirely waive hold for old customers
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Penfed has a really sweet system called Trust In You, you enter the check info, and most of it is made available right away.


Penfed Link

Note: you must be a member for six months before you can use this service.

I used to have checks held up by Bank of America for 11 business days. I asked them if they can do anything about it but they said no, that is their policy.

I looked around and opened a Citibank EZ-Checking account. According to their terms and conditions, their holds are 5 business days max for a non-local check of more than $5k. But, after my account has been opened for a while (>1 year now), I have deposited non-local checks of >$10k and they are available immediately. And I have scheduled Vanguard or Emigrant to take the money out the next day without problems. This is in CA.

my bank will let me cash the check imeddiately with no fee
what this means is the money that is still in the account stays there
and then you have cash of the check
if the check bounces I belive they debit your account for the amount of the check(never had a check boucne so no idea)
anyways since you know have what you had in your account + amount of check in cash, the cash you can put into anywhere you want since cash is instant deposit

<<I used to have checks held up by Bank of America for 11 business days. I asked them if they can do anything about it but they said no, that is their policy. >>


they can if you ask nicely enough/have a relationship w/ them

Commerce Bank gives next banking day availability up to $5000. Then, if it is above that amount, they make $500 available and there is POSSIBLY a 2 - 5 day hold on the rest of the funds. Anything above $5000 is up to the discretion of the bank for funds availability.

As a perk though, Commerce Bank ends the banking day at 6 PM when most other banks end at 3 PM.

penfed is quite cool! wish i'd qualify to join them!
scanchain - could the flexibility of Citibank EZ hold rules be due to you qualifying for their "Check-As-Cash" program?

jziri said: [Q]penfed is quite cool! wish i'd qualify to join them!
scanchain - could the flexibility of Citibank EZ hold rules be due to you qualifying for their "Check-As-Cash" program?

You can - it costs 425 for join the NMFA, and then your in penfed.

I highly recommend it, along with USAA, although USAA does not have as liberal hold time, IMHO, but I am not 100% sure. Both Penfed and USAA tend to be VERY consumer friendly!

jziri said: [Q]penfed is quite cool! wish i'd qualify to join them!
scanchain - could the flexibility of Citibank EZ hold rules be due to you qualifying for their "Check-As-Cash" program?
I have a CD, but it is less than $1500, to maintain the $1500 minimum required to avoid fees. I think the immediate availability is due to "good customer" program.

Reg CC governs the maximum that a bank can hold a check.

[Q] A reasonable period of time is defined as 1 additional business day for "on-us" checks, 5 additional business days for local checks, and 6 additional business days for non-local checks.

A non-local check over 5,000 can be held for 11 business days. The check must be made available as if the check were not a large deposit. If a special hold is placed on funds, then $100 can be made available on the next day and $4,900 can be made available on the 5th day. The remainder will be made available on the 11th day.

The only leeway you will see with this is if a bank trusts you or not. If they are going to hold the check, they will hold it for as long as they are allowed.

[Edit: I guess I missed the point of the post. Back when I was in banking, the way I decided whether or not to hold a check was to look at the account history. If the account holders average relationship balance was 10k and they wanted to deposit a 6k check, I would let it go, assuming they had been around a few years and had a good history. If they had an average balance of $6.50 with 3 NSF's that week and wanted to deposit a $500 third party check it would be held according to the schedule from Reg CC. I understand that a lot of this is automated now, but it really boils down to the relationship you have (or lack) with your bank. With a strong average balance and long history, you can get checks 2 or 3x your average balance through without a hold.]

I once deposited $12k into USAA, and it was on hold for 9 biz days, although online shows all amount are availabe, the notification come by snail mail so you could get hit by NSF easily!!

In my past experience, deposits of up to $5000 at Wamu (at least for me) have resulted in instant availability. >$5000 and you might have to wait a week. (These are in-person deposits. ATM deposits are usually slower.)

Wells Fargo Bank: upto 11 business days for amounts higher than 5k. However I have had tellers put 15K without any hold...But some times its been funds will be available on 11th day...

My impression was that after the 21st Century Act, commonly known as Check 21, the checks will clear faster.

Does anyone know how various banks handle ACH deposits into accounts as far as how long they impose a hold?
Are the inbound ACH deposits available immediately, or are there federal regulations that permit banks to put holds on ACH deposits?

YMMV depending on the teller.

stdi said: [Q]My impression was that after the 21st Century Act, commonly known as Check 21, the checks will clear faster.

Yes - they will clear faster as banks take advantage of it. But it has nothing requiring the banks to pass on the benefit to consumer. The permitted hold times remain unchanged!

mikeres said: [Q]Does anyone know how various banks handle ACH deposits into accounts as far as how long they impose a hold?
Are the inbound ACH deposits available immediately, or are there federal regulations that permit banks to put holds on ACH deposits?

If I remember correctly, an RDFI (receiving depository financial instituion) is required to make funds available on the settlment date. If the information is available by 5:00 pm the day prior, it must make funds available at the open of business on the settlement date. Reg CC is not as precise, but in effect says funds must be available day of settlement.

jziri said: [Q]stdi said: [Q]My impression was that after the 21st Century Act, commonly known as Check 21, the checks will clear faster.

Yes - they will clear faster as banks take advantage of it. But it has nothing requiring the banks to pass on the benefit to consumer. The permitted hold times remain unchanged!

Another federal check law (the Expedited Funds Availability Act) specifies the maximum times by which your bank must make funds available to you, though most banks make funds available faster than required. Check 21 did not change these maximum hold times. However, the Expedited Funds Availability Act requires the Federal Reserve Board to reduce maximum hold times in step with reductions in actual check-processing times. Thus, over the longer term, if Check 21 sufficiently increases the speed of check processing, the Board will reduce maximum hold times.

I'm not sure about other banks, but Netbank has the following disclosure:

"Funds from any deposits (cash or checks) made at ATMs we do not own or operate will not be available until the fifth business day after the day of your deposit (longer delays may apply; see below). We will make $100 available 1 business day after the applicable cut-off time for that ATM, unless exception holds are applied."

I imagine other banks have similar policy for deposits at foreign ATM's, in that the hold time differs if the check was not deposited at a local B&M teller/ATM.

Food for thought.

chienandalou said: [Q]BofA $20,000 cashier's check:
$500 immediately
$2,000 in a week
$17,500 in two and a half weeks.

That's a violation of Reg CC. If you request next-day availability on a cashier's check, the bank must provide it, up to $5,000. Of course, the bank may require a special deposit slip to allow this availability.

http://www.federalreserve.gov/pubs/regcc/regcc.htm#determin

National City told me that they were going to hold an out of state check for 9 days (10k) before they would make the funds available to me. After I put up a stink and pointed out that with Check 21 they have the money within a business day they reduced it to 5 days (and the check was taken out of the other account in less than 24 hours). What irritates me is when I take a check from my account and deposit into my joint checking (same bank) and it takes 2 days to "clear"...

My contribution: Washington Mutual actually does a 2 week hold on a deposit over $5. Example: $20K deposit. $100 available immediately (<- LOL! just $100?). $4,900 available after 5 business days. Remainder of $15K available after 10 business days (from deposit date).

Edit: Actually, it's 11 days instead of 10. Also, the deposit was an out-of-state check, depositing in person. My checking account has been open for 4 years.

After I had been with my bank for a while (and since it was soooo long ago, I don't remember how long) they stopped putting holds on my deposits. (It was Crocker bank then, Wells Fargo now) When I changed branches (again years ago), I asked the manager to do the same with my new account, referencing my old account. He did it without argument.

One more item for NetBank, if you make a deposit of over $5000 (Check or ACH), they put a hold on the excess over $5000 for 9 business days. (Found this out when moving my money from ING to Emigrant Direct via the checking account)

But on the other hand, they pay 1.5% interest on the money, so that would help mitigate the interest lost.

-gheldean

chienandalou said: [Q]ciba said: [Q]chienandalou said: [Q]BofA $20,000 cashier's check:
$500 immediately
$2,000 in a week
$17,500 in two and a half weeks.

That's a violation of Reg CC. If you request next-day availability on a cashier's check, the bank must provide it, up to $5,000. Of course, the bank may require a special deposit slip to allow this availability.

http://www.federalreserve.gov/pubs/regcc/regcc.htm#determinPer my discussion with the branch manager, he stated that my account didn't have a balance high enough to make him comfortable with releasing the funds in less than 20 days or so. And now that I think about it, the amount he made available to me immediately I think was either $200 or $300.

Thanks for the heads-up.

Then your bank just admitted to a likely violation of Reg CC.

While a bank is permitted to make a special exception to the normal Reg CC timeline the exception must relate to something specific about the check you are depositing NOT you or your account balance.

Excellent thread idea. Thanks jziri.

Update Washington Mutual

On-us: No Hold

Local:
$100 immediate credit
<5k = 2 business days
>5k = 7 business days

Local Cashier's check:
$5000 immediate credit
The rest on hold for 7 business days

Non-Local:
$100 immediate credit
<5k = 5 business days
>5k = 11 business days

Non-Local Cashier's check:
$5000 immediate credit
The rest on hold for 7 business days

Imagine that you have a local check for $10,000. $100 is creditted to your account immediate, $4900 available in 2 days, and $5000 available in 7 days.

-silentak2

Remember that it is business days (Monday-Friday) so Saturdays and Sundays DO NOT count.

Try getting an overdraft account. Most banks will give you next day funds availability up to your credit limit on check deposits.

You guys are confusing two matters - funds availability and check clearance. Funds availability is something spelled out in each banks terms and conditions. Your bank has no control over how long it takes the other bank to release funds to them. So, they spell out the schedule at which they will make funds available to all customers based on the type of deposit. This does not mean they have or have not collected those funds. Many banks give next day availability on bank checks and gov't checks. That doesn't mean they have collected that money overnight. For larger banks this is all computerized as they are scanning checks that are being processed, so nobody can override the system. Also, I believe it's a requirement for banks to allow you to earn interest once the funds have been collected, regardless of funds availability.

The second part is that even if your bank has collected the funds, the law allows for late returns for specific reasons such as forged endorsement. This is afterall the entire reason the nigerian scams are so successful. They send you a fake/forged cashiers check, you deposit it, the bank makes the funds available to you, you wire out the "tax" and keep the rest, then a week or two later your account is debited the full amount of the check. A check can be returned, a wire cannot. So, even if the funds are available to you and even if the check has cleared, you might find your bank hesitant to release the funds. Again, check your banks terms and conditions. Many banks reserve the right to place a hold on balances for any reason for any period of time. For a larger transaction you will find many banks' tellers will send you over to an officer for approval...there's a reason for that. With the amount of fraud that occurs out there many banks are looking to protect themselves.

Before anyone starts arguing that I am wrong. What a bank can do is spelled out in its terms and conditions, what I said above is true for my bank. And, I also happen to work for it.

USBank: Manager advised that large checks should be deposited at a teller and not an ATM. I was told ATM check deposits automatically get pessimistic holds placed, as they don't actually see the customer.

gheldean said: [Q]One more item for NetBank, if you make a deposit of over $5000 (Check or ACH), they put a hold on the excess over $5000 for 9 business days. (Found this out when moving my money from ING to Emigrant Direct via the checking account)

But on the other hand, they pay 1.5% interest on the money, so that would help mitigate the interest lost.

-gheldeanI found your post somewhat strange in that you said that NetBank would put a 9 business-day hold on deposits over $5K even if they were ACH deposits. So I called Capital One to see what their policy was for their Money Market and High Yield Savings (HYS) accounts.
They said that after the account is open for one month that all deposits are held for five business-days. I asked what about direct deposits, ACH deposits, and direct government deposits (such as tax refunds).
Their answer was the same all deposits are held for five business days. In desperation, I asked what if I transfer funds from my Cap One MM to my Cap One HYS. The answer was still the same - a five business-day hold.

I guess a bank can have whatever policies they want, but do any of our banking mavens know if there are any regulations that require speedier availability of direct deposit funds?

edit: spelling

Funds Availability Act
and Regulation CC

alladin880 said: [Q]Try getting an overdraft account. Most banks will give you next day funds availability up to your credit limit on check deposits.

You guys are confusing two matters - funds availability and check clearance. Funds availability is something spelled out in each banks terms and conditions. Your bank has no control over how long it takes the other bank to release funds to them. So, they spell out the schedule at which they will make funds available to all customers based on the type of deposit. This does not mean they have or have not collected those funds. Many banks give next day availability on bank checks and gov't checks. That doesn't mean they have collected that money overnight. For larger banks this is all computerized as they are scanning checks that are being processed, so nobody can override the system. Also, I believe it's a requirement for banks to allow you to earn interest once the funds have been collected, regardless of funds availability.

The second part is that even if your bank has collected the funds, the law allows for late returns for specific reasons such as forged endorsement. This is afterall the entire reason the nigerian scams are so successful. They send you a fake/forged cashiers check, you deposit it, the bank makes the funds available to you, you wire out the "tax" and keep the rest, then a week or two later your account is debited the full amount of the check. A check can be returned, a wire cannot. So, even if the funds are available to you and even if the check has cleared, you might find your bank hesitant to release the funds. Again, check your banks terms and conditions. Many banks reserve the right to place a hold on balances for any reason for any period of time. For a larger transaction you will find many banks' tellers will send you over to an officer for approval...there's a reason for that. With the amount of fraud that occurs out there many banks are looking to protect themselves.

Before anyone starts arguing that I am wrong. What a bank can do is spelled out in its terms and conditions, what I said above is true for my bank. And, I also happen to work for it.

No, a bank cannot 'reserve the right to place a hold on balances for any reason for any period of time' as they have no right under Reg CC to do so. In other words, such a term or condition is trumped by federal law.

What a bank can and cannot do is spelled out in many places other than it's terms and conditions, a fact that is occassionally lost on bank employees.

RE: CapitalOne

Reg CC funds availability doesn't cover savings account, money market accounts, etc.

dweick said: [Q]RE: CapitalOne

Reg CC funds availability doesn't cover savings account, money market accounts, etc.That's the answer I was afraid i would hear. I guess that when it comes to MM and savings accounts, that banks can implement whatever policies they want on funds availability.

What I'm looking for is a FI that allows for free push/pull ACH transfers, with short hold times on funds avaiilability.
I will post this question in the existing FW thread Accounts that can initiate free ACH in/out, since it seems more appropriate there.

Anyone that has additional information, feel free to PM me, or look for my post in Accounts that can initiate free ACH in/out.



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