Banks holding payroll checks?

Question

I would like to know why banks can hold paychecks?

I know there are laws saying they can hold paychecks. How can the government think this is fair? I deposited a paycheck into the account on Saturday (Before 2:00). The teller said it had no hold - but failed to mention it was considered a Monday deposit.

For the most part we don't have a problem because we use direct deposit. This was one check unfortunately that could not be directly deposited.

They claim that Saturday isn't a bussiness day so it will be considered a Moday deposit so it will be available Tuesday AM. We spent some money and our account is considered overdrawn.

How is this legal?
How is this fair?

It's a paycheck. You need your paycheck to live!!!

To everyone who thinks I was referring to Saturday as a business day I wasn't.

I know that Saturday is not a business day, but the funds aren't available are they. It's a hold! Simple as that.

Who can afford to have their paycheck sit in the bank for 3 days while the bank processes and posts the transactions?

My last bank put holds on personal checks but not paychecks. Paychecks were a live transaction and available immediately.

I think this is horrible practice, and shouldn't be allowed by law.

Answer 1

I've found out that it depends on where you live and the bank you're dealing with. Banks can do anything they want when it comes to placing holds on deposited checks. I used to live in Florida, and it would take up to a week for my deposited payroll check to credit to my account. I started going to the bank and CASHING my check, and then depositing the CASH because they don't put a hold on cash.

I have since moved to Alabama and my payroll checks have NEVER been held. I deposit on Friday before 5:00 p.m. and the funds are showing up by Saturday.

Even when I make the deposit at one of the bank's ATMs, it shows up by the end of the next business day (and Saturday's not considered a business day by any bank, even when they're open on Saturday.)

It is NOT fair when any funds aren't credited the minute you deposit the check, no matter what day or hour it is. When you use your check card, it's IMMEDIATELY considered taken from your account.

Answer 2

Saturday is never considered a business day. Business days are only Monday through Friday, excluding holidays. Anything that goes in on a weekend or after the cutoff on Friday is considered a Monday deposit. They don't care if it is a paycheck or a birthday present from your aunt.....it always takes at least one business day to settle in your account. This Tuesday is a bank holiday so it isn't a business day either.

It's legal because this is clearly posted in the bank and was on the paperwork you signed when you opened the account. At my bank there is a little sign on each teller window that funds are not always immediately available and may not be until after the next business day. It also has information about weekend deposits being considered Monday transactions.

I'd go talk to the bank manager in person to explain what happened and why you believed the funds were available immediately. If you have been a good customer and it was a one time overdraft situation, they will usually work with you and waive the fees. The thing that really stinks is that you could have cashed the check and had the money immediately with no overdrafts.

Answer 3

It's perfectly legal and is still widespread practice.

Banks process transactions one of two ways -- in real time or by batch at the end of the banking day. Most banks still process End-of-Day by batch for teller transactions. They end the banking day at around 2:00 PM or so so that the evening crew running the End-of-Day processing can get out at a reasonable hour. (Even with that cutoff, it's consided a good day if they get out by 1:00 AM the next morning!) Any transaction handed over the counter after the end of day cutoff goes on the next banking day's transactions.

If you look at the terms of service agreement that you signed when you opened the account you'll find that this was probably disclosed to you there. It's also very likely that the receipt shows Monday's date as the processing date. That constitutes notice to you that the transaction won't process until Monday which would then make it available on Tuesday. Since Tuesday is a banking holiday, your money is effectively unavailable until start of business on Wednesday.

In the future if you have to make a deposit and the bank isn't putting a hold on the funds, split the transaction and take your cash from the teller and make a cash deposit for the remainder of the check.

Answer 4

Banks have to guarantee that your paycheck is a good check so that they will not lose money. It takes an average of 3-5 days for all checks to clear. You would really be surprised at how many supposedly reputable companies pass along bad paychecks to their employees.

The Federal Reserve banks are not open on Saturdays therefore any transactions that a bank does on Saturdays are considered the next business day. There should be notices placed in your bank stating something to that effect. Your bank has more than likely been working on Monday's (12/31/07) date since 2pm Friday (12/28/07).

Answer 5

Holding Checks

Answer 6

If you don't understand that a bank can't process checks on a Saturday and Sunday, you should slap yourself. The check has to clear. It can't clear if the Fed is closed. If you're depositing a check drawn on 'Bank A' into your account in 'Bank B' then 'Bank B' has NO IDEA if those funds are available. It's simply a piece of paper. Stop acting like a child. Don't spend money you don't have.

Answer 7

This is not a "hold" on your paycheck. Everyone (almost, apparently) knows that Saturday is not a business day and that bank transactions will post on the next regular business day. Consider it a lesson learned.

Answer 8

Yes banks can do whatever they want. I deposited over $600.00 in cash, left the bank then my wife called me to tell me that she needed some extra money.So I went back to the bank and they told me it would be 3 days for my deposit to clear. So I talked to the manager and he told me the same. Well that really pissed me off so I told them that I was closing my account and that I anted all my money. Never trust banks.

Answer 9

When you must deposit an actual check always cash it first and then have them deposit the cash. It will be made available much more quickly then it would as a check.

Answer 10

it fairly is ridiculous many times, they permit you to've a small volume of the examine the 1st day, and that they must launch the rest interior a minimum of the subsequent 10 business enterprise days. some thing is extremely unusual.