Saving money without using the bank?

[minnie1928]

Originally Posted by disneysteve

I have no idea why in this day and age with everything electronic it takes any time at all to confirm that a check is good. What about those systems that let businesses deposit checks by scanning them in and not even having to go to the bank. Isn't the whole point that the business knows instantly if the check is good? If you can do that, why does it take the bank even 3 days to verify a check?

I'm wearing my flame retardant suit tonight so I'll take this one...Not all banks are running as "tech savvy" as others, so they are still pushing paper checks through their equipment, flying it to the Federal Reserve, the Fed processes it and then flies it to the originating bank that the check is drawn on. Say the check is bad, then the check has to go back in the reverse fashion to the original depositing bank. Banks aren't necessarily "verifying" the check, they are simply waiting to see if it comes back which can sometimes take several days.

Now, you mention the scanning of checks...yes, that is infinitely faster because instead of moving physical paper from one state to another they are simply transmitting electronic files with the check images. However, not all banks are doing this yet. As of a year ago (when I retired from banking) many/most of the smaller banks were not. However, it's definitely a growing trend.

I see many people saying that the check they deposited was from a reputable business (or something similar) as if to say that the business wouldn't write a check that would bounce. When the bank equipment is processing the work, it doesn't care who's reputable or not. The work is processed the same regardless of who wrote the check. All it sees is a string of numbers and that determines how soon you will receive your credit for the deposit.

When you open an account at a bank you should ask to see their schedule of funds availability. They are not all the same. The bank I used made the funds available the day after they were deposited. Another option is to have things directly deposited if possible, no clearing needed for these transactions.

[Inkstain82]

I'm fairly certain paper processing of checks is no longer legal.

[minnie1928]

Originally Posted by Inkstain82

I'm fairly certain paper processing of checks is no longer legal.

Since when?

[Inkstain82]

Originally Posted by minnie1928

Since when?

Just looked it up, my mistake. I thought the Check 21 act required banks to use the electronic means, but it only gives them the option. Never mind.

Regardless, is the banking industry even denying that they fiddle with deposit clearing times to try to generate overdrafts on certain accounts? I was under the impression it was more or less an open practice called "fee-based banking."

[minnie1928]

Originally Posted by Inkstain82

Just looked it up, my mistake. I thought the Check 21 act required banks to use the electronic means, but it only gives them the option. Never mind.

Regardless, is the banking industry even denying that they fiddle with deposit clearing times to try to generate overdrafts on certain accounts? I was under the impression it was more or less an open practice called "fee-based banking."

Will they deny it, h*ll yes! However, not all banks are this scrupulous. That's why you need to look at the funds availability notice. Like I said, my former bank gave you credit the next day regardless of where the check came from. I think the "big boys" behave differently than the smaller community banks.

I'm not saying that banks don't use it to their advantage, I'm just saying that there is legitimate amounts of time necessary for paper checks to clear and that it can be several days (or longer in some circumstances). The banks may also be using this as a tool to prevent losses from kiting. It really depends on each bank and their experiences. My bank very rarely lost money in kiting and maybe that's why we were lenient on the availability.

[Inkstain82]

The funds availability notice will generally say they can hold it for as long as legally allowable for any reason they please.

It's not a question of legality, of course they have the right. At issue is whether the the time it takes to clear deposits is based solely on the process itself, or whether the banks are intentionally manipulating it to create overdraft fees for certain clients. I think the answer is pretty clearly the latter.

Find two people with a checking account at a major national bank. One has never had an overdraft, one has had five in the past six months. Have them both deposit a check from the same source at the same time at the same branch, and see whose deposit clears first. The customer who has been identified as a fee generator will not see their deposit cleared until at least a few days later than the good customer, if not longer.

The wife and I found the best way to get around it was to simply cash the check, drive down to another branch and deposit the cash. It was pretty asinine that this could make a seven-day difference in availability, but it did.

[minnie1928]

Originally Posted by Inkstain82

The wife and I found the best way to get around it was to simply cash the check, drive down to another branch and deposit the cash. It was pretty asinine that this could make a seven-day difference in availability, but it did.

I'm really surprised that this works....at the banks that I worked at, if you cashed a foreign check they put a hold on your account for the amount of the check for a period of time. Going from one branch to another should make zero difference. The branch doesn't process the work, the bank's processing center does and that's where your transaction truly hits your account. The teller transaction is just a "memo" transaction that usually erases at the end of the business day, to be replaced by the permanent transaction created by the bank's processing center.

[Inkstain82]

Hmm. Well, I'd say I was glad it did work, but it only delayed the inevitable as we learned some valuable lessons about personal finance and banking.

[PetMom]

If you are keeping paper money it in itself is so fragile and easily stolen or lost or burned. If you had not been in an apt. I would have suggested a backyard plan that an eccentric millionaire used - he distrusted the banks as did many after the Great Depression. Jokes about matresses and mason jars also refer to this. Many Russians are now doing a mattress plan.

Banks are getting creative with more fees, processing checks so that they can get a great bounced check bonuses and adding on expenses for any acct. that dips below a certain amount. I keep after our few accts. to make sure they never go near a low number because they can spring on you a new 'maintenance' fee and you could be overdrawn without even writing a check.

I am surprised a CU may have done something you do not like - they tend to be better with their treatment of customers here.

Some people (some survivalists) do not want their assets tied up in a bank in case of disaster. They keep gold/silver coins which are more sturdy and some cash.

You can keep cashing your check and use money orders to pay bills. And use your cash envelope system for bill paying which is also used by a lot of people now.

you might be happier with a CU that has given trustworthy service to other people - ask around. If you have your months of savings built up I just don't think it a good idea to have all that in cash in an apt., plus you do lose interest as on poster mentioned.

Minimally using basic services from a CU you can like might be the best compromise.

[cicy33]

Originally Posted by minnie1928

I'm wearing my flame retardant suit tonight so I'll take this one...Not all banks are running as "tech savvy" as others, so they are still pushing paper checks through their equipment, flying it to the Federal Reserve, the Fed processes it and then flies it to the originating bank that the check is drawn on. Say the check is bad, then the check has to go back in the reverse fashion to the original depositing bank. Banks aren't necessarily "verifying" the check, they are simply waiting to see if it comes back which can sometimes take several days.

Now, you mention the scanning of checks...yes, that is infinitely faster because instead of moving physical paper from one state to another they are simply transmitting electronic files with the check images. However, not all banks are doing this yet. As of a year ago (when I retired from banking) many/most of the smaller banks were not. However, it's definitely a growing trend.

I see many people saying that the check they deposited was from a reputable business (or something similar) as if to say that the business wouldn't write a check that would bounce. When the bank equipment is processing the work, it doesn't care who's reputable or not. The work is processed the same regardless of who wrote the check. All it sees is a string of numbers and that determines how soon you will receive your credit for the deposit.

When you open an account at a bank you should ask to see their schedule of funds availability. They are not all the same. The bank I used made the funds available the day after they were deposited. Another option is to have things directly deposited if possible, no clearing needed for these transactions.

What intrigues me is that if I write a check and give it to a business it will clear really fast. But if I deposit a check from a long standing business they hold it for 9 business days. That is actually two weeks by the way. I just find this interesting.

[minnie1928]

Originally Posted by cicy33

What intrigues me is that if I write a check and give it to a business it will clear really fast. But if I deposit a check from a long standing business they hold it for 9 business days. That is actually two weeks by the way. I just find this interesting.

Just because you see your check charged to your account rather quickly, does not mean that the business you paid received credit for that deposit in the same amount of time. I'd suspect that they are receiving credit at the same rate that you do (or something comparable, if they are using a different bank).

[Rach]

Originally Posted by minnie1928

I'd open an account at a local, community bank...one with a good reputation. If nothing else, it will save you check cashing fees. If you have no account, they may charge you to cash checks....ultimately saving you no money.

If you had unauthorized charges then you need to dispute them. If they aren't responding then move up the management chain.

Fees aren't assessed "for no reason". The reason could be a misunderstanding on your part or a mistake on the bank's part. Either one should be able to be explained to you.

I've worked in banking for about 20 years, so I might be a little sensitive about this. But, trust me...not all bankers are out to screw you over.

Since you work at the bank tell me how to handle when you get a fee which the bank does little to explain once they see your not just going to go for the okey doke and smoking mirrors with the many excuses they provide for overdraft fees which were not your fault!!

I mean grant it I understand that you work for the bank so ultimately your job is to defend and protect the back so you can have a paycheck but how do we as consumers handle when you ask a simple question concerning a charge or overdraft and customer support gets upset because your making sense and so instead of answering truthfully they would rather get upset and eventually hang up after they've been back into a coner! I mean surely you can understand that just like your a little sensitive about the back I'm a little senistive about my fiances..