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With all the banking law changes in the past few years - I have been unable to get the facts on how long a paper check takes to be posted.
If Bob deposits a check Monday. When will the funds be available for Bob to pay Jack?
Bob is a LARGE LAW FIRM
The check is from a LARGE INSURANCE COMPANY
The amount over $100K
Jack feels like his is getting jacked around.
Any links or government info will be greatly appreciated.
Last time I looked, the rules differed depending on whether the check was from out of state. For a local check, isn't the rule three days? Something fairly short. Of course, each day there's a cut off point at a certain time of the day. Make a deposit after that time and deposit is technically made the next day.
Update: I guess they changed the rules a few years back. Now, it looks like everything is "local" but there are various exceptions depending on the amount of the check and so on. The FDIC website has a summary of the law.
A couple of years ago I created a trust account because some money unexpectedly pooped up out of nowhere for my mother's estate. Check from a New York brokerage firm. Local bank.
I was allowed access to $5000 immediately but for the rest of the 23000 I had to wait two weeks.
I get that there is such a thing as fraud, but the problem is that the banking rules were set up decades ago, and why haven't they changed? Why couldn't the brokerage firm made a direct deposit to the trust account, with the funds available immediately? Why do banks continue to live on the float at our expense?
A couple of years ago I created a trust account because some money unexpectedly pooped up out of nowhere for my mother's estate. Check from a New York brokerage firm. Local bank.
I was allowed access to $5000 immediately but for the rest of the 23000 I had to wait two weeks.
I get that there is such a thing as fraud, but the problem is that the banking rules were set up decades ago, and why haven't they changed? Why couldn't the brokerage firm made a direct deposit to the trust account, with the funds available immediately? Why do banks continue to live on the float at our expense?
You could have asked for a wire transfer
What money are they making on the float that they don't make anyhow? Most checking accounts don't earn interest and within brokerage accounts the funds get invested into a mmf or bank deposit before the hold is gone
Also checks can be returned up to 30 days from the date of deposit which far exceeds any hold time.
Checks clear accounts in 2 days. Banks can put holds on the check for up to 7 business days though.
If Bob Deposits Check today (monday) then the 100,000 will come out of the Insurance companies account on Wednesday. Even though the deposit has cleared the bank account of the insurance company, it doesn't mean didly if the bank Bob deposited it to put a hold on it. Likely, at 100,000 it was put on hold for a min. of 5 business days.
Checks between major banks clear electronically in a range of hours to overnight. Funds are available in a range from immediately to days later depending upon the institution. This is not a FED issue as they have not been the major processor of checks for many years.
Checks between major banks clear electronically in a range of hours to overnight. Funds are available in a range from immediately to days later depending upon the institution. This is not a FED issue as they have not been the major processor of checks for many years.
It may not be an "issue" for the Fed, but there is a law... And no, it does not necessarily "depend" upon the institution.
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