Get that bank account NOW

Marian
Tue, 07 Aug 2007 07:34:53 +0000

So she opened an account herself with Citibank and THEN discovered she wouldn’t be able to withdraw her money for a week! (Is this NY rules or just Citibank?)



I don’t think it’s NY rules. It’s where the checks that she deposited in that account come from. Checks from local banks clear almost immediately. Those from banks in other parts of the country don’t.

So if your daughter was trying to open her account using checks written on banks from other parts of the country (such as her parents’ hometown bank account), she would have to wait a substantial amount of time before the money would be available.

When my daughter went to open her checking and savings accounts yesterday at a bank in Maryland, she had with her 1) some cash, 2) a check written by me on my account at a bank three miles away, 3) a paycheck from her summer employer (she works at a local retail store that is part of a national chain, and the checks are issued from a bank in Texas), and 4) a birthday check from her aunt, who lives in California. She was told that the first two items (the cash and the check from the local bank) would be available for withdrawal immediately, but that it would be a full week before she would have access to the money that had originated at the banks in Texas and California.

This has important implications for how we’re going to manage money in the future, since my daughter will be attending an out-of-state college (in New York state). If my daughter needs money quickly, I will NOT send her a check. Instead, I will deposit money in her account, which she opened at a hometown branch. That money would be available to her immediately; she would be able to go to the bank branch at her college and cash a check the same day. But if I sent her a check, not only would it take a couple of days to arrive in the mail, it would take several days beyond that to clear (because she would be depositing it at a bank branch in New York, and I would have written the check on a bank in Maryland). This is entirely different from the way that I send money to my son, who attends an in-state university. For him, I write checks and send them to him by postal mail, he deposits or cashes the check, and the money is available immediately.

It is absurd that this sort of thing still occurs in the 21st century.

In my experience, problems of this sort occur even if the two banks in different parts of the country are actually branches of the same bank. In the course of settling our parents’ estates, my sister and I have had to send checks to each other on several occasions. We both have accounts at Bank of America, and the estate accounts are also at Bank of America. However, her account is at a branch in California, and my account, as well as the estate accounts, are at a branch in Maryland. It does not matter that all the accounts are at Bank of America. It still takes a week for the California branch to clear a check from the Maryland branch, or vice versa.

Sometimes I think that these bank people WANT us to store cash under the mattress and carry it taped to our underwear.