24 Nov
why does it take a bank 7 -10 days to clear a out of state check when they have new technology today?
why does it take a bank 7 -10 days to clear a out of state check when they have new technology today
It's simple. They want you to spend as much money as possible between the time you wrote the check and when the money is taking out to increase the chances of you bouncing the check.
They get to use your money for free. :o)
November 24th, 2008 at 9:32 amReferences :
It's simple. They want you to spend as much money as possible between the time you wrote the check and when the money is taking out to increase the chances of you bouncing the check.
November 24th, 2008 at 9:57 amReferences :
It doesn't. They just say that incase there is a glitch in the system.
November 24th, 2008 at 10:16 amReferences :
I work for a bank
For outstation cheques to be realised at least 15 days time is there and if you do not get response ask bank peaple to give a reminder for the fate of the cheque sent for collection.
November 24th, 2008 at 10:22 amReferences :
U can use the new technology today, but it'll cost U somewhat more to use the Federal Reserve overnight system though
November 24th, 2008 at 10:45 amReferences :
Check 21 requires the electronic truncation of checks…meaning they are imaged and sent to the federal reserve. Checks don't normally take 7-10 days to clear, but it can take that long to find out they are non sufficent funds.
OK…this is why it takes 5 days (sometimes not always, local banks should clear in a day and you will understand why)
Day 1…You take your large dollar check to the bank teller who says she has to put a 5 bus day hold on the check. Said check is imaged by bank and sent to that bank's local federal reserve bank electronically.
Day 2…Federal reserve bank does their thing…if the check is local it is sent right to the local bank and clears that day…sending bank recieves money. A non local bank is a bank that doesn't use the same federal reserve branch as your bank. So the non local banks check is sent on to that banks federal reserve branch.
Day 3…transit time and processing time (non local feds can be across the country and takes time for the information and man power to catch up as well as time differences across the country mean one fed reserve bank can be noon and the other can be closed…
Day 4…Non local banks fed reserve branch recieves the check your bank sent and processes it.
Day 5…Non local bank recieves check and debits the money from account holder.
Lets say on day 5 there was no money in the account holders bank account. The process has to be reversed, there for it can take 10 days to 2 weeks for an NSF check that was drawn on a non local bank (rembering non local to a bank means they do not use the same fed reserve branch as your bank) it can take so long for you to find out about it.
This is quite a bit faster than it used to be…and it is why banks do not like that for a $5000 check they can only put a 5 bus day hold on the check, because it can take longer than that for them to find out the check is no good. And it is also why for checks larger than $5000 the government (reg CC) allows banks to put an extended hold on the check, or if the bank feels the check may be counterfit or fraudulent.
Hope this explination helps.
November 24th, 2008 at 11:24 amReferences :
Bank Teller
It's actually up to the discretion of the banker. I've had a $50k check cleared and available the same day.
I've also had a $1900 commission check stopped by a rapacious employer, and then the funds were scooped out and left me in… an inconvenient position.
The main reason, though, is that banks make a lot more money that way. They love racking up fines and fees, and if they've got money that you can't reach, it's accumulating compound interest. This sounds insignificant for three-figure checks but imagine tens of thousands of them, day in and day out, over six years.
Bankers know how to make money. Believe it.
November 24th, 2008 at 12:14 pmReferences :