New bank accounts - your first 30 to 90 days

[DHK]

You just signed the signature card, shook hands with your new-found friendly neighborhood banker, got a whole bunch of legal disclosures and you're feeling pretty good about this place. Your sick of your old bank and you're ready to just close out all your accounts there and bring everything to your new bank.

DON'T DO IT JUST YET!!!

Your banker (sales rep) still has a risk-based responsibility to keep as well. According to FDIC regulation CC, your new bank is allowed by law to hold EVERY check deposited into your account for up to 30 days! :shock: That INCLUDES cashier's checks!

Why? Your bank is still getting to know you and your banking habits & patterns. It's too soon to give immediate access to funds that haven't cleared the drawee bank yet.

The majority of losses a bank incurrs are on new accounts less than 24 months old. Yet, even more staggering is losses on new accounts less than 6 months old.

The bank is going to protect its assets, which means less convenience for you, initially.

At WF, all new accounts are "flagged" in our systems to have a transaction approver review the deposit and make the appropriate decisions. This usually shows up for 30 to 90 days. What if your funds are held? What if the transaction is refused because the check is made out to 2 people, but only 1 of you is on the account?

This is why I recommend keeping your existing relationship until the "newness" of your account wears off a little. Then I would do a wire transfer from your old bank to your new bank. This way the funds CAN'T be held.

BTW, the ATM system is going to do the same thing, only they hold your deposits even longer to ensure they clear. Definitely do your banking in person for the first few times. Then you should be able to do your banking at the ATM if you choose to do so.

The other best thing for you to do is:
Make sure your banker introduces you to the Operations Manager

The operations manager is usually the "bad guy" because they make the unpopular decisions to hold checks, decline transactions, etc. Meet this person and get their card - especially if you are anticipating high $ transactions. (btw, I AM the operations manager for my branch and I LOVE to meet new customers all the time.)

It's a whole lot easier to make exceptions for people you've met and had a good conversation with.

[Anonymous]

According to FDIC regulation CC, your new bank is allowed by law to hold EVERY check deposited into your account for up to 30 days! :shock: That INCLUDES cashier's checks!

I was wondering about that...

A credit union that I had recently opened up an account with (because of a new loan), I deposited a cashiers check and they actually held it!

I was furious because I thought a cashiers check was as good as gold and I needed the funds right away.

I can understand other negotiable instruments but I thought that a cashiers check was about the same thing as cash.

Now this makes sense...

[Ravenous Wolf]

The above was actually my post... I didn't realize it put me down as guest. I was wondering why it allowed me to post without me even logging in...

[Anonymous]

if the bank holds a deposit and you have checks come in while they are holding that deposit, what happens?? Do they cover the checks and charge you overdraft fees???

[DHK]

They will most likely NOT honor your checks (unless you have overdraft protection established) and they will charge you fees.

When you make the deposit, there would be a hold notice that tells you to not use these funds until they are available and the date they will be made available.

[xjrosie]

Not always true. We are (or rather, my husband is) a member at Standard Federal. When he opened the account, they would put a hold on his checks, and charge overdraft fees for any payments he made, but once they removed the hold, they would honor the payments and remove the fines. Bank One did the same thing, but without any warning at all.

[credit_junkie87]

The first time I deposited an international check into my account, it took 3 weeks to clear even though my account had been open for 4 months. The next time it only took a couple of days.

[DHK]

International checks have different rules, routing numbers, etc.

International checks can have the drawee bank "challenge" the endorsement of those checks INDEFINITELY - unless they are sent to "collection" directly from the international bank.

This is the process for clearing an international check. It takes time, and usually a small fee.

I do recommend this process to 1) protect you against a fraudulent check, and 2) protect you against the other bank/check issuer to challenge the endorsement and getting their funds back.

[deltadawn]

Very informative.

A couple of years ago I got upset with DH bank (still don't like it) and we looked around for a new bank. When we questioned wire transfers, international transfers etc., they told us they would put a hold on the funds (even if cash had been deposited). DH stayed with his bank to avoid a hold on our funds (and repeating myself, I still don't like it).

I feel that I'm the customer and I don't express my emotions when you do something I don't like - I just refuse to do business with you.

This forum has taught me that I only hurt myself with that attitude.
I closed AX, Macey's and Mervyns in 99 and closed one of our HSBC cards in 2007. CRA's are still reporting these accounts as closed per customer request. I started to xcl Cap1 and WAMU this year - but since these are my oldest accounts, I decided against it (based on the information that these accounts may be beneficial on my credit report scores).

[dixgomez]

I think some banks like you to deposit more to them just to open and account, they wanted you to deposit more of your money to them...




_________________
IRS Problems (www.taxmatterssolutions.com)