New banking rules: Clear a check payment in a day


“When bills come due, only cash is legal tender. Don’t leave home without it.” – Warren Buffet

I do not know about some of you out there, but I have noticed a change in the way a lot of banks operate.

I remember years ago that I would write a check and it would take three to five days to clear. Not anymore.

I wrote a check a few months ago and it cleared my bank account the next business day. That’s right, the next day!

There is no room for error in this new era of banking. The slightest margin of error is only allowed if you have your checking account linked to your savings account as overdraft protection.

However, that would require you to have cash in the first place to cover your checks.

I am a firm believer in not writing a check you can’t cash. And since cash is the only legal tender to pay bills, it is best that you have some.

I did some research and found some very interesting information.

A bank that I use sent a notice that they would now be doing faster processing of funds. This included same day available funds for checks.

I also read that banks typically do deposits five days a week but do debiting of accounts seven days a week.

This means that if you have a deposit coming in that is not done on Monday through Friday, but continuing to use your account over the weekend, this could cause you to go negative if you overspend.

In addition, if banks decide to structure transactions it could negatively affect your bottom-line.

Let’s say, hypothetically speaking, that you have check payments outstanding and are using your debit card at the same time. You write checks on Wednesday, use your debit card on Thursday and get paid on Friday.

If your payroll direct deposit comes in first, then all your payments and transactions are covered.

However, with just a flick of a button, a bank could strategically decide to do all transactions in a different order.

By first processing the cashing of the check payments, then posting debit card transactions and having your payroll come in last.

This type of financial rearrangement could wreak havoc on your bank balance if you go negative and cause numerous overdraft fees.

I one time had a bank charge me over $100 in overdraft fees for approximately $5 in several small charges that placed my account in the red!

Safe to say, I closed out that account.

Just some food for thought.

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