Banks (funds, payment, deposit, credit)

[mm34b]

Why do banks put holds on electronic deposits from the U.S. Treasury, such as social security, veteran disability payments, tax refunds and government pensions?

[cpg35223]

Because they're making money off the float, that's why.

Oh, are you looking for a GOOD reason?

[pghquest]

Originally Posted by mm34b

Why do banks put holds on electronic deposits from the U.S. Treasury, such as social security, veteran disability payments, tax refunds and government pensions?

Not all banks do, but mm34b is correct, they are making money off the float.

[allforcats]

Pghquest is right that not all banks do. I think savings and loans probably do, credit unions most likely do, but the large commercial banks likely don't. The smaller the institution, the more they have to CYA.

[The Dissenter]

Originally Posted by allforcats

Pghquest is right that not all banks do. I think savings and loans probably do, credit unions most likely do, but the large commercial banks likely don't. The smaller the institution, the more they have to CYA.

actually i work in a large national bank and sometimes we place holds on large govt checks. i doubt we put holds on electronic deposits.

[sherrenee]

Electronic payments received by your institution for deposit in an account — An electronic payment is considered received (deposited) when your institution has received both payment in collected funds and information on the account and the amount to be credited. (Under other rules, funds for most electronic deposits are made available on the day of deposit.)

I have worked in banking for almost 8 years and I have never seen an institution put a hold on an Electronic Deposit, the fund are suppose to be made available on the release date, which is determined by the sender.

[Waterlily]

We have some of our money deposited as an electronic payment into our checking account. There has never been any hold on it. This is a smaller bank. Actually we've had that done at another bank as well. My husband and I use 2 different banks.

If that is happening to you then I'd consider changing banks or at least ask them what's up?

[Katie1]

My sons bank will cash my disability check,,,,But if I deposit it directly in his account they attach a 3 day hold...WHY

[cdelena]

Originally Posted by Katie1

My sons bank will cash my disability check,,,,But if I deposit it directly in his account they attach a 3 day hold...WHY

I would think it is because it is a third party transaction.

I have never seen a hold on two party electronic transactions, but they are required to hold the funds until the effective date which can be specified as a later date. Most systems will not even show the funds until the effective date but if you inquire you can find the transaction is complete and the funds pending.