Banking Warehouse question

[groze]

I am not talking about the illegal bank warehouse.

 

Why do financial institution have to hold credits a few days in their warehouse before putting it in the account? I can understand debits but never credits. As soon as the bank gets the credit it should be made available immediately.

[Kevin20]

I am not talking about the illegal bank warehouse.

 

Why do financial institution have to hold credits a few days in their warehouse before putting it in the account? I can understand debits but never credits. As soon as the bank gets the credit it should be made available immediately.

 

Warehouse? Never heard it called a warehouse.

 

The answer is they don't have to sit on funds before crediting them to you. If the bank is doing that, they are only doing that to grab a tiny bit of profit on a tiny bit of capital -- and they can get away with it.

 

Though, nowadays, every bank I use credits deposits immediately, or at least same day. Are you talking about something else?

[groze]

I will use February as an example. Social Security checks are available on the 3rd. But the banks usually gets them a day or two before in their holding account (I was told it was called a warehouse) waiting to be deposited. My relative gets her paycheck credited to her account on Friday but it is sitting at the bank on Wednesday in a holding account.

[HoldenMcGroin]

You sure you don't mean clearinghouse?

 

And the answer from the post above yours is probably the best answer you're gonna get. They just want more money.

[TheBanker]

ACH Direct Deposits usually take a few days to process - which is generally why employers send them out a few days ahead of the pay date. They're not instantly sent to the account like a wire would be, so banks aren't holding on to anything. Federal Regulation CC requires that any electronic deposit (ACH Direct included), once received, must be immediately credited.

 

Also, you're looking for the term clearinghouse. And clearinghouses are not part of a bank. They are intermediate systems that underwrite ACH transfers from bank to bank, generally within 24-48 hours.

 

My relative gets her paycheck credited to her account on Friday but it is sitting at the bank on Wednesday in a holding account.

 

And... who says it's there on Wednesday? The employer? Because they're wrong.

Edited February 28, 2012 by TheBanker

[groze]

ACH Direct Deposits usually take a few days to process - which is generally why employers send them out a few days ahead of the pay date. They're not instantly sent to the account like a wire would be, so banks aren't holding on to anything. Federal Regulation CC requires that any electronic deposit (ACH Direct included), once received, must be immediately credited.

 

Also, you're looking for the term clearinghouse. And clearinghouses are not part of a bank. They are intermediate systems that underwrite ACH transfers from bank to bank, generally within 24-48 hours.

 

My relative gets her paycheck credited to her account on Friday but it is sitting at the bank on Wednesday in a holding account.

 

And... who says it's there on Wednesday? The employer? Because they're wrong.

 

 

The bank & Cu said it was in a warehouse, scheduled to be deposited on the date the employer or government wants it in the account and not before. The bank or Cu can actually see the money by looking into their warehouse. They can do the same thing with debits that come out automatically.

 

 

Here is some info I found on a bank that does it early.

 

http://www.dcu.org/prodserv/convserv/direct.html

 

With Direct Deposit, saving money is easy! Your payroll, retirement, Social Security, or other recurring checks can be electronically deposited into your DCU accounts. There's no lunch-hour lines, postal delays, or theft to worry about. Your money is in your account and ready to use. And, you can get access to your money to spend, save, or invest up to two days before pay day. Many employers let us know electronically, up to two days in advance, how much money will go into our members' accounts on pay day. At DCU, we credit those funds to your account as soon as we know! We know of no bank that offers this FREE service. It's a great reason to choose DCU as your Primary Financial Institution.

 

 

http://creditboards.com/forums/index.php?showtopic=445459

Edited February 29, 2012 by groze

[TheBanker]

ACH Direct Deposits usually take a few days to process - which is generally why employers send them out a few days ahead of the pay date. They're not instantly sent to the account like a wire would be, so banks aren't holding on to anything. Federal Regulation CC requires that any electronic deposit (ACH Direct included), once received, must be immediately credited.

 

Also, you're looking for the term clearinghouse. And clearinghouses are not part of a bank. They are intermediate systems that underwrite ACH transfers from bank to bank, generally within 24-48 hours.

 

My relative gets her paycheck credited to her account on Friday but it is sitting at the bank on Wednesday in a holding account.

 

And... who says it's there on Wednesday? The employer? Because they're wrong.

 

 

The bank & Cu said it was in a warehouse, scheduled to be deposited on the date the employer or government wants it in the account and not before. The bank or Cu can actually see the money by looking into their warehouse. They can do the same thing with debits that come out automatically.

 

 

Here is some info I found on a bank that does it early.

 

http://www.dcu.org/prodserv/convserv/direct.html

 

With Direct Deposit, saving money is easy! Your payroll, retirement, Social Security, or other recurring checks can be electronically deposited into your DCU accounts. There's no lunch-hour lines, postal delays, or theft to worry about. Your money is in your account and ready to use. And, you can get access to your money to spend, save, or invest up to two days before pay day. Many employers let us know electronically, up to two days in advance, how much money will go into our members' accounts on pay day. At DCU, we credit those funds to your account as soon as we know! We know of no bank that offers this FREE service. It's a great reason to choose DCU as your Primary Financial Institution.

 

 

http://creditboards.com/forums/index.php?showtopic=445459

 

That is a specific policy of DCU, not a Federal policy. Banks are generally notified of what's going into the account (known as pre-authorized ETFs), but they are not required to credit that amount as they have not yet received those funds, and they are not in the bank's general ledger. So no, the bank does not have ownership of those funds.

 

What DCU, and some other FIs, are specifically doing are essentially mini cash advances off the DD, without fees, etc. Officially, a bank, or CU, is not in possession of those funds until they are directly deposited to one's account.

 

Also... whoever used the term "warehouse" needs to be beaten with a 2x4. Clearly, they don't know what they're talking about if that's the terminology that's being used.

Edited February 29, 2012 by TheBanker

[groze]

The smaller banks & credit unions use the term warehouse. Banker. I assume you maybe a big wig-no offense meant. In your own bank or a smaller bank or credit union ask the customer service representative or a teller to explain what a warehouse is. I asked my banks out of curiosity. Both banks said it a holding place for your funds. They were surprised I knew about that. The debit or credit will be posted on the dates the biller, employer, or government wants it to be.

Edited February 29, 2012 by groze

[TheBanker]

... which would be the Automated Clearing House (ACH) systems. And funds are not "held" there - even temporarily. They are the processors that move funds from institution to institution, but funds are not temporarily held there. Institutions will be notified of pre-authorized transactions (direct deposit, as an example) through the system, but again, funds will not be held there until the "pushing" institution sends the funds for remittance.

 

Warehouse is not a banking term - and for the hell of it, I decided to ask my local contacts. The main offices of all three local credit unions, as well as the main offices of three local county banks all said it's not a term small institutions use, either.

 

Just because some teller/CSR makes up a term does not make it so. You think someone getting paid $10 an hour is a book of knowledge? If so, I have a bridge to sell you.

[groze]

CSR, & tellers of two different banks call it a warehouse. One of them said it is a holding account. Someone gets a paycheck direct deposit on the 24 but the banks gets it on the 22 or 23rd. The reason the banks does not deposit it, the employer says not to deposit tell the 24th. From the way the person talks, the money has already be transmitted.

 

 

To me personal, it sounds like a restricted direct deposit. That would make more sense. The banks are holding the funds until the employer or government wants it deposited.