For God's sake, what is up with banks not allowing a person to make a
deposit without placing a HOLD on our money?  I have 3 jobs and 2 kids
and a totally disabled husband. I am trying to run a business and,
OBVIOUSLY, am lean and mean. I don't have extra money and we play it
close. Every @#$%#$ time I go to make a deposit (we deal with
customers from all over the country) my bank puts a hold on the funds.
 This causes checks to occasionally bounce and then they tell me that
- because checks have bounced - they are putting a hold on my money.
This goes on and on, around and around, and I'm about to rip my hair
out by the roots!  How can I improve my situation if they continue to
put a 2-week hold on my deposits? It's a great deal for the bank -
They make money from me for the overdrafts, then charges from the
person on the other end and then they probably take my money they're
holding and invest it in short-term notes and make money off MY MONEY
also!  How is this fair - or even legal?  I can't be the only small
business owner with this problem.  Am I going to have to start
stuffing my money in my mattress?  My question is this - I understand
it is apparently the bank's RIGHT to do this to me, but I refuse to
allow this to continue - so is there another kind of banking
institution that won't hold my money and cause my checks to bounce -
then tell me thatthey have to hold my money because my checks bounced?
 They make me feel like some kind of criminal, when I have
legitimately made deposits of "good" checks and actually DO have the
money in the bank.  So far I have had this experience with Wells Fargo
and Washington Mutual.  Any ideas? I'm ready to be done with this
craziness!

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Request for Question Clarification by taxmama-ga on 29 Apr 2003 12:15 PDT

Dear Patrice,

I'm with you on this. 

I've had the same experience. 
With both banks.

In fact, I got so upset, when speaking with a
reporter, she insisted on writing about it.
http://www.bankrate.com/brm/news/chk/20020802a.asp?keyword=&authorid=22&firstn=Laura&middlen=&lastn=Bruce


Where are you? If you're in California, I have a 
solution for you. 

Best wishes,

Your TaxMama-ga

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Clarification of Question by patrice1-ga on 29 Apr 2003 13:35 PDT

I'm unsure how to respond to comments from individuals.  For example,
I'd like to thank "taxmama" for her comment, but also point out that
99% of the checks we get through our business are NOT foreign checks. 
They are simply from individuals and businesses in the United States. 
This problem still happens.

---

Clarification of Question by patrice1-ga on 29 Apr 2003 13:36 PDT

Also, I DO live in California.  Is there something special I can do in
this state to take care of the problem?

Hi Patrice,

I was hoping that you're in California. Good.

My business also generally collects money from individuals.
After all, I prepare tax returns. 

Every time I have a problem like the one you describe with my
accounts at either Wells Fargo or Washington Mutual, I call my
bank manager at Union Bank.
http://uboc.com/

Usually, she tells me that she doesn't even need to get special 
permission to clear those checks. They just don't have those 
long hold policies for foreign checks to begin with. 

Even if you're not in Studio City, talk to Christine, the branch 
manager there. She can work with you to set up your account to
address your sources of income and avoid these holds.
http://locator.coolmaps.com/uboc/uboc.cfm?id=833&cid=121
She will also waive set-up fees and, perhaps even the monthly
bank fees for the first year. Oh, yes, also, see if you can 
get a free copy of QuickBooks with the account. 


(I have clients all over California banking with her. She opens
the accounts and they use their local branch for their daily
banking.)

And, yes, as soon as you can, do what BC recommends. Set up the
overdraft protection. Try not to use it, though. It's expensive.
Around 18%+ a fee each time you tap into it.

Instead, if you own a home, have her get you an equity line. 
She'll waive the $75.00 fee - and those loans are at something
closer to 5%. And you can write checks against that credit line,
without cash advance fees. And you don't pay any interest when 
you aren't using the balance. She did that for me - and it was a
big help during those times of the year when money was tight. 
 
As special, added insurance, get to know your local branch manager,
too. In fact, refer them a client now and then. Help them out - and
they will go even further to help you when you need it. 

(And if you bring cookies to the branch now and then - the staff 
will really remember you - and try to make sure you're taken care of.)

Please let me know if this works for you.

Best wishes

Your TaxMama-ga

---

Clarification of Answer by taxmama-ga on 30 Apr 2003 05:33 PDT

P.S. While the credit union suggestions are excellent on a personal 
level, they won't help on a business level. CU's will not give you
a shorter hold period. I tried. 

P.S.S. You can also try City National Bank - but their fees are high.
And unless you are a fairly large volume client, they have proven not
to be very helpful or accommodating to my clients, despite their very
inviting ads.

Hi Patrice1-ga,

I think we all can relate to your frustration. The "float" between the
time the bank gets your money and the time they let you use it makes a
lot of extra money for financial institutions - especially if it
causes an overdraft and you get charged extra for it. It is also bad
for your credibility as a business owner to have checks bouncing.
Explaining to the person who got the bad check is embarassing at best
at worst it could cost you a client or a supplier.

There isn't anywhere I know of that won't place a hold on checks being
deposited except for check cashing services - and they charge you up
front for cashing the checks. You could cash the check at one of these
services and deposit the cash in your bank for immediate access.

The only other way around it is to get overdraft protection - which
will cost you interest charges if you use it, but will be cheaper than
the $30 -$60 you get charged for a bounced check.

If you find anywhere that will allow your checks to go in as cash -
post it. I'd like to know about it.

Good luck!
bcguide-ga

I agree with Bcguide's comments. Overdraft protection would solve the
problem.  Another one would be not to spend any money until it X days
after depositing it. (This would be tough to initiate if you're on a
tight budget.)  But what the banks are doing is legal.  What I suggest
you do if you can't get overdraft protection is talk to the banks that
are in your area and see if any of them will credit your accounts
immediately with the understanding that you would compensate the bank
for anything that bounces.  If a bank wants your business, it will
come up with something to get it.

I quit using banks at all and joined a credit union.  Most of the same
services without the charge.

My wife works for a bank, and she says the best thing you can do is
walk the deposit into the branch and specifically request no holds be
placed on the funds.

If it continues to be a problem, you may consider talking to the
branch manager and/or district manager for the bank.

I belong to a credit union and they seem to place 5-7 day holds on
anything above $2000.  It is frustrating.

I thought that there were business banks, which are more suitable for
someone like you. I would stay away from banks for regular people.

Also, according to my 'how to run a small business guides', it's a
really good idea to have 50% of your cash flow extra (in cash) for
these sort of things. I suppose when things get tough, it is difficult
to have extra cash around.

Claudietta

While it may be frustrating, you have to understand that NO bank is
going to pay out money for you before they have collected enough money
from you to cover it.  (Your signing and giving them a check does not
mean that the bank has collected the money.) It might help to know
also, that it is illegal for you to knowingly write checks without
having sufficient funds AVAILABLE in the account to pay the checks. If
you do this often enough, you may be subject to criminal penalties at
worst, or a lower credit rating at best.  If things are that tight in
your cash flow, you may need to find a source for a loan to cover the
float. Or if you are a good enough customer for the bank, a bank
officer may be able to decrease your hold times or offer you a line of
credit to cover the situation.

In Canada I use MoneyMart. http://www.moneymart.ca/cheque_cashing.asp

No hold at all - not even for foreign checks. They clear the check
while you are standing there - a 5-15 minute process - then hand you
the cash minus their fees.

Since most of my checks are from the US and the bank would charge me
fees on those anyway, I've decided that Money Mart's 3% is worth it
for the instant cash.

I'm not sure if there is a similar service in the US.

My pet peeve here is the fact that CASH deposited to an ATM AT THE
BANK still gets a 3-5 day hold because the envelopes are processed at
a central location, not right there in the bank.

But this is your rant ... not mine .. :-)

-K~

Interestingly, I do not have this problem in Canada. When I deposit a
foreign check through an ATM machine, it only takes 2 days for me to
be able to spend it. Also when I print out my balance (or use pc
banking) it shows me two balances... one with spendable money, and one
with funds that are still on hold. Either way, it only takes two days
at the most before the money can be spent. Note that although this is
a personal bank account, I know the same holds true for business bank
accounts because of my family business. Hopefully you will be able to
resolve this, I know there must be better banks out there and you
should switch. By the way, I use CIBC http://www.cibc.com

tisme-ga

Iam based in  England so it may be different over there -is it worth
taking credit cards instead-over here you should have cleared funds in
3-4 days-check the net out for cheapish ways of doing it- "non
illigitimo carborundem'"-forgive the schoolboy Latin but  i hope you
get my point

Couldn't agree more. In this day of electronic fund transfers and
'instant' banking, having to wait days or even weeks for cleared funds
is an insult to the depositor.
As an example of what I see as blatant exploitation, my wife and I
both have separate accounts at the same branch of a well known UK
financial organisation. My salary cheque is paid directly into my
account on the last day of the month. Ideally, I would then like some
automated debit and credit system to transfer a sum of money from my
account into my wife's account and make it instantly available. In
practice, my money would disappear into a black hole for up to a week
before being eventually credited to my wife's account. When I
complained I was told the only way it could be speeded up was by doing
a manual transaction.I could draw out cash and pay it straight back
into my wife's account where, as a cash transaction, it would be
instantly available. Fine, but it is not very convenient or logical to
have to go to the bank and do manually what could, and should, be a
very simple automated process. Locally, the tellers understood the
problem, possibly from numerious similar cases and have a
'work-around'. Every month a teller at the bank manually takes cash
from my account and posts it to my wife's account. This, apparently,
is not the normal policy of the bank, and the tellers are probably
bending the rules to keep customers happy. But it is not ideal as
sometimes they forget or are too busy to process the manual
transaction and payment is delayed. My point though is the automated
system wants to treat cash transfers between accounts as coming from
an uncleared source without any business clarity or consistancy. Or is
it just an easy way of using my money for their own benefit?