Home Theater Forum › Home Theater Forum › Other Diversions › After Hours Lounge › Someone explain check holds to me...
New Posts  All Forums:Forum Nav:

Someone explain check holds to me...

post #1 of 16
2/18/08 at 3:05pm
Thread Starter 
Okay.. I got a separate checking account a few months ago (getting divorced.. long story). It's pretty much just my paychecks being direct deposited... I haven't dropped a lot of personal checks in there. But, on Friday, I deposited a personal check given to me for $744 dollars. I checked my balance this morning and there's still a hold on the check. WTF? I called my bank and they explained to me that they hold the check for 2 business days.. and tomorrow they will release $100 to me... and the rest the next day which just sounds stupid to me.

It's not a big deal... I'm just waiting to buy a camera and.. well... I have to wait until wednesday now.

What I don't understand is.. Why is it that I can wire money to another bank instantly, yet, when I deposit a paper check.. the funds aren't transferred immediately? You would think they would want to get the $$ while the funds were there.

Does my bank suck or is this normal practice?
Reply
post #2 of 16
2/18/08 at 3:47pm

Re: Someone explain check holds to me...

Check holds are a standard practice for larger checks (over $10k) where it can take up to 14 days for the funds to be fully available to you, but I've never heard of it happening on a check that small. Just offhand, I'd say your bank sucks.
Reply
post #3 of 16
2/18/08 at 5:07pm

Re: Someone explain check holds to me...

A lot of banks here place a 2 day hold on personal checks larger than five or six hundred dollars.
Reply
post #4 of 16
2/18/08 at 6:19pm

Re: Someone explain check holds to me...

If the check is drawn off a different bank then they have no way of ensuring the check is good. It makes sense that the check would need to clear the other bank to ensure the money is there.
Reply
post #5 of 16
2/18/08 at 8:41pm

Re: Someone explain check holds to me...

My bank will put a hold on a check if there isn't enough in my account to cover it.
Reply
post #6 of 16
2/18/08 at 11:36pm

Re: Someone explain check holds to me...

Quote:
Originally Posted by Brandon_T
My bank will put a hold on a check if there isn't enough in my account to cover it.
Exactly. Usually when you cash a check immediately, what you're actually doing is withdrawing the amount of the check from your checking account, with a credit to your account for the value of the check.

Although, considering the way banks are buckling under the mortgage crisis, it definitely makes sense to make sure the other bank can actually clear the check.
Reply
post #7 of 16
2/19/08 at 3:47am

Re: Someone explain check holds to me...

Here's some good info:

Examples of Availability Rules
Reply
post #8 of 16
2/19/08 at 7:38am
Thread Starter 

Re: Someone explain check holds to me...

Thanks for the link Seth... I don't feel so bad now knowing everyone is subjected to this. It just seems silly in this day and age of instant communication that money can't be moved around as instantaneously.

Paper checks are so... so... last week anyway.

What screwed me up is President's Day.. which, apparently doesn't count as a day of business by banks... so I have to wait an extra day for my $$.
Reply
post #9 of 16
2/19/08 at 7:59am

Re: Someone explain check holds to me...

There was a new set of banking laws passed a couple of years ago. These laws speeded up the process of servicing checks considerably. I don't recall the exact number but it used to be that the banks could hold checks for something like 3 weeks but the new law cut it down to a couple of days, PLUS making processing the physical paper check optional to the banks. Nowadays there isn't much legal difference between a paper check and a debit card transaction slip.
Reply
post #10 of 16
2/19/08 at 10:32am

Re: Someone explain check holds to me...

It does seem odd that in an age where most any retail store or other business can scan your paper check and debit your account immediately, that banks don't seem to have this same ability and have to take days to figure out if the money is available to cover a check.

But most banks do enforce this waiting period.
Reply
post #11 of 16
2/19/08 at 5:49pm

Re: Someone explain check holds to me...

Retail stores cant tell. They pretty much take checks on the honor system if you can believe it. Anything over a certain amount and they will call the bank to make sure the funds are available. Most also take down your drivers license number.
Reply
post #12 of 16
2/19/08 at 9:49pm

Re: Someone explain check holds to me...

Transactions are processed on a priority basis. Electronic debit cards are processed to put a hold on funds immediately, but ACH debits and checks are batch processed (usually overnight) at the time they clear the account, so an account might have sufficient funds "now", but when they are all debited from the account, the money might not be there to cover all of them.
Reply
post #13 of 16
2/20/08 at 11:13am

Re: Someone explain check holds to me...

Banks suck. I remember back in the day when Bank One was around and we had an account with them, they actually charged us if checks we wrote were cashed out of order. How the hell are we in control of when a business cashed our checks? They also charged us $7 every time our account went under $500, which happened oftened because we had to pay bills and usually never had more than $100 after paying them all.

We finally switched banks. Now we bank at a place that doesn't charge us stupid fees for stupid things that are out of our control.
Reply
post #14 of 16
2/20/08 at 2:20pm

Re: Someone explain check holds to me...

Quote:
Originally Posted by Jimi C
Retail stores cant tell.
Some of the larger chains are now processing checks electronically at the register, just like a debit card. They scan the check, their computer processes the account number and pulls the money from the account immediately. Some stores will actually hand the paper check back to the customer with their receipt (no need for them to keep it, the transaction is already processed and money received).

This is why people should not count on "a couple days" for the check to clear, thinking that they can write a check on Tuesday and their Thursday paycheck will cover it. Depending on where you shop, you could be in for a rude surprise in the form of overdraft fees from your bank.
Reply
post #15 of 16
2/20/08 at 2:53pm

Re: Someone explain check holds to me...

I once got charged a fee because someone cashed a check I wrote at the teller for my bank. Apparently, the fact that my account type did not allow me to use a teller (just ATMs) applied to anyone cashing checks on my account too. Go figure.
Reply
post #16 of 16
2/20/08 at 4:03pm

Re: Someone explain check holds to me...

Shopping around for banks is really helpful. I have savings in several banks (because of the FDIC limits) and I've been able to find some really nice ones. Zions Bank (formerly the private bank of the LDS church) pays good interest and is really helpful at waiving fees. Same with Idaho Central Credit Union.
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: After Hours Lounge
Home Theater Forum › Home Theater Forum › Other Diversions › After Hours Lounge › Someone explain check holds to me...