(800) 853-2651
SHOP NOW

Bank Practice Rant

S

Super-H-Mike

Member
I have seen several bank complaint posts here , and this is mine. I check my balances daily online for security and peace of mind. My bank closes at 6, and deposits made after 5 are put on next days business, ok fine with me. But, lets say I check my balance at 9 pm because I am expecting a couple of large checks to go through , and all is fine and dandy. No problem, go to bed and deal with it tomorrow. Then, when I check again the next day, the large checks have gone in, and put me negative, my overdraft protection has kicked in or maybe topped out and there could be some fees. This has happened more than once to me, and it seems unfair somehow. This is probably the computers settling accounts overnight correct ? At like 2 a.m. or something ? The bank is closed for business, but not really I guess. You can t make a deposit anyway. Yes, you can transfer money 24 hours a day, however I often have checks to deposit but just could not get there by 5. This is a small business account and auto transfer from personal funds makes accounting messy. Besides , I checked balances at like 9 p.m. and all was good. I have not looked into depositing checks by phone picture yet, maybe I should.
 
They run or clear checks at night, and often smaller banks have a larger bank run their checks. So if you're banking at a smaller bank what ever bank clears their checks will usually run them in the same order. Meaning if the bank is clearing check for six banks they'll run Bank 1, Bank 2 Bank 3 until all are done. If you're Banking with a big or regional bank they may run checks for 8 to 12 hours to get all of them run or cleared.
 
A lot of banks try to make money from overdraft fees. You just have to keep changing banks until you find one that doesn't. If I'm overdrawn as long as I make a deposit to cover it before the end of the business day they will list the deposit first and there is nothing overdrawn.
 
I started doing the phone picture deposit thing and seems like it takes forever to go through. I made a deposit days ago, it says accepted but still not posted to my account. I have bills to pay.
 
I don't know how your bank does it but....Mine the online stuff gets updated overnight. It's like their accounting end of day occurs then and any outstanding deposited debits like checks you wrote shows up after the end of day. I keep an Excel spreadsheet of all my transactions and it automatically keeps a running balance so I know when I might get in trouble.

I have used the photo deposits. I was concerned if it would work. But when I hadn't gone to town for a week and had checks to put in I kinda got spurred into it. Found out it was, after all set up, very simple and quick. Mine I enter the amount of the check, pic of front and back and DONE.
 
A long time ago i made a deposit at the same time i ordered checks they charged me an overdraft because the deposit had a delay and the cost of the checks would have been a few penny's more then i had in the bank. But if i had cashed the check then deposited the cash everything would have been ok i switched banks right after that. I also had deposited a large rent check than checked on the internet and it was all in there the next day only a third showed because they hadn't gone through the other bank but it was odd one day everything next nothing.
 
That is one of my concerns about the photo deposits,how fast are funds available ? Also if a mistake is made somehow, is it easy and quick to resolve ?
 
A teller from my smalltown bank called me at 10:30am to say that my property loan payment had bounced the night before.
What did I want to do about it?

Then I remembered I had forgotten to make a quarterly transfer from another account to the loan payment account.

So I asked her to transfer $XXX from one acct to the loan payment account. She did.

I'm a happy customer.
 
Overnight, banks run through debits from your account then they run deposits to the account. The bank does this in this order in hopes of collecting overdraft fees(big money maker for banks).

Years ago, Government tried to pass legislation to have banks reverse the order of debit/credit but the banks lobbied hard and won.
 
I had a problem with Citizens bank like that. I'd make a deposit the end of the day, then go out at night, spend money on dinner/show/etc. The following day they'd add up the negative's before the deposits when they opened. So you could get 5-6 ding's into the negative, charging you $35 a pop, before htey looked at your deposits. I argued with them many times that they had my money, cash, in person, before I made the charges. They'd say there was nothing they could do. I switched banks and haven't had the problem since.

Some time later, there was a class action suit against citizens for this practice, and citizens lost. I've been receiving semi-regular checks from citizens for $100~ for the past 3-4 years as they unearth more of this bad business practice.
 
I've never paid for an overdraft fee, ever. My checking accounts are protected by my savings account. No charge if bank takes money out of savings to cover a check.

I do all my banking in person too, no online banking for me.
 
True ! But sometimes unavoidable as a small business operator. I have been in business for going on 12 years now and I can tell you that cash flow is still the biggest hurdle I struggle with. I will freely admit that I am much better at my work than I am at accounting ! I used to hire it out , but it got too expensive and so I now do it myself.
 
Most checks deposited would not be 'available' until the next business anyway. In addition, ACH transactions process through accounts 3 or 4 times a day. Some ACH transactions can even process the same day now. Nearly impossible to match transactions with deposits. Walmart payments come through almost instantaneously. As for the bank charging fees, NSF transactions add to work load of employees. Shouldn't the bank get paid to work?
Just some thoughts from a 25 year bank officer
 
Russ ...... a lot of good comments but yours is the one that makes the most sense (and hopefully should be the solution). My first paycheck in 1961 for a summer job in high school was $45 ...... my dad took me down to the bank and set up an account (he at least let me invent a signature for the account, he seemed to want to handle everything else) .... ha! He put $40 in and gave me $5 and said that was my spending money for the next two weeks. Sort of shocked me but when I think back, I guess I still have that $40 somewhere in the system because I never had an overdraft in the last 56 years.
 
I understand your plight as a small business owner. I am in agreement with Dave Ramsey on the majority of his money-handling ideas, and they are conservative. I, personally, choose to keep a portion of my "emergency fund" stashed inside my regular checking/saving accounts as cushion- $1500 extra in the checking and $500 extra in the savings means never I see a fee from the bank. At statement time, I just have to remember to add the hidden money to my register balance to equal the statement.

Where I differ from Dave is the small business: I agree that you must keep your personal money (profits from the business) separate from the business if at all possible, to prevent a business failure from destroying your personal situation as well (or, limiting the damage).

I see this as an opportunity to use a business credit card. You know you are repairing K Effective's Rumney Oil Pull, and he wants to add a two-stage turbo setup with digital fuel injection. You buy the parts online with your business credit card today, 2/7, get them dropped by drone tonight and start the install. In ten days, I pick up my new Rumney Sleeper Pull and give you a check drawn on Fred's Bank. They're kinda slow at Fred's, and the check you deposited on Monday the 20th clears on the 27th. The parts you bought on the 7th showed up on your bill in the mail, but isn't due for a week yet. You have my money before my parts are owed. You pay your card bill in full. Done.

Worst case, if you also were working on some guy named Goerge's Terramite, installing all new LED lighting, air seat and chrome wheels, and he slips you one of the Ben Franklins he likes to print at home on his original Gutenburg printing press, and the bank rejects it. You have enough from my check to pay part of the credit card bill, and only end up paying interest on Geo's parts for one month, while you contact a couple of online collection agents (DukeandRocco.com) to shake ole' Geo down. You collect his cash before the next payment is due, or even pay it as soon as you get it. You might go the whole year and not pay $100 in interest. Overdraft fees/etc. will take that much in two episodes in a year. My son got hit for $12 one month for being a few dollars short. IF he'd had the $500 cushion, that would have saved him $12, which is the same as earning 28.8%APY on that $500.

Retained earnings may not be possible for a small business, and they come from the customers' bills, if at all. A card might allow for the float you need in your business finances, without raising your prices. YOU HAVE TO BE CONSERVATIVE WITH IT AND EXIBIT SELF-CONTROL.

tl;dr

any references to real persons or online personas, is made in jest, take is as a joke :D
 
You may have a point, and I appreciate the humor of your response ! However,I want to avoid a credit card if possible.
In part, because it is one more layer of accounting , which I actually detest. The other part is the temptation to use
it in cases of "tight" cash flow.
 
1 minute after midnight and some funds deposits go through- social security, retirement account funds do this for me at least. Federal bank clearing of checks and some other transfer starts about the same time- it is the start of 'next business day' and the local banks will have most of their updating done by 0600 that morning- the banks computers or bank service provider may have a schedule of receive the EFTs, then back up transfers, back up account files before updating accounts-- if a power failure or earthquake happens, the files are backed up and if during update processing something goes wrong- disk crash, software failure, abends- the files can be restored off site and processed there. Some deposits are put to account- but then reversed as in case of ISF checks or some fraud deposits that get checks written before vamoose - banks have a security interest and the law enforcement and legislature let them protect themselves some- legislatures trying to 'protect' small customer are asked to pay up bank loss from rapid unsecured processing, either taxpayers money or their paychecks, a reason the bank lobbyists seem to win. Between Identity theft, forged money orders and counterfeit bank drafts- and sometimes bank short of funds before going bankrupt- the processing has some delays just to check things out. A cushion in account is handy, practical for most personnel accounts. Small business has a possible problem- do you have occasional check that isn't covered because payee was depending on float of 2 days? How about credit card reversals? Small business, some large business and banks have potential problems with sloppy book keepers and actual thieves-- Amish doing cash business along with the dope dealers, car thieves general scamming populace are a target for the Federal cash grabbers- but don't have much bank hassles, just have to have shotgun handy to guard cash box. RN
 
I would be a much bigger fan of his if he would publish what investments he has that are consistently making 10% every year. He gives so much "advice" based on that claim but I have only made 10% twice in over 25 years of investing - 2008 and 2009.
 
I would be a much bigger fan of his if he would publish what investments he has that are consistently making 10% every year. He gives so much "advice" based on that claim but I have only made 10% twice in over 25 years of investing - 2008 and 2009.
Click to expand...

Just was looking at my wife's 2016 review sheet from her 403B.

Thrivent Financial MidCap Stock Fund made 28.2% in 2016.

Overall, her entire retirement account made 18.9%. Just wish it was 10 times bigger to start the year!!!
 
Getting into a battle with the bank over this=you lose anyway. Ran a small business for 15 years. had the same problems you are having. Like it or not, the only solution is to never write checks on deposits for at least 24 hours. Especially local checks. I agree with Ramsey on principle, but you HAVE to have a credit card to order replacement parts and other business necessities on line or by phone. Very few suppliers offer a line of credit. That's one place where Ramsey is all wet.
 
My bank peeve, if I deposit a check the funds are available the next business day, if I cash the check and hand the cash back across the counter to deposit it, the funds are available immediately. Have questioned them on that and never got a satisfactory answer.
 
My bank does not seem that bad. But as others said you may be cutting it to close. Solutions get a line of credit or larger over draft. Also what about a 30 day account from your supplier or a card for it and pay it each month?
 
Consider making more purchases with a credit card and paying off the full credit card balance every month to avoid interest charges and overdrafts.

If I remember right the time between when a deposit is made and when it is credited to an account is called float. Banks collect interest on their float. With electronic transfers the float is only a day. Back when paper checks physically traveled to a clearing house, the float could be close to a full week.
 
One of our banks does the count the debits, charge for the over draft, and then ad up the deposits thing. My pay check doesnt go there and the checking account is not there either.
 
It is really a simple thing to understand. The way the law and banks look at it your not supposed to write a check without the money being in the account. That is the long and short of it. The bank has clear rules they are going by. Your saying that these rules do not work for you. The days of the "float" allowing you to have several days to manage cash flow are over.

So you have several options.
1) Setup a line of credit that acts like overdraft protection.
2) Do not write checks without the fund in the bank.

These two are the most common.

This being said I have been in various businesses over the years. Cash flow is one of the biggest issues in any of them. Keeping the in and out balanced is a struggle.
 
There is a bank in our small town, that if you say you might need a operating loan for seed or fertilizer and then don't use it they will still charge you a 100 dollar fee. Is this a common practice with banks today.
 
NEKS: The Bank is question had invested time and effort to make the money/loan be available to the farmer/individual. The fact that they did not use any of that money does not make the cost of getting it ready to be available, go away. With interest rate low a simple filing fee can eat up any short term interest earned on a loan. So these costs are being passed along to the user.

There are many thing about "Modern" banks that I dislike and think should be illegal BUT your example and Super-H-Mike's really are just standard business practices that are in now way "wrong".
 
I agree with you JD Seller in that this business is under capitalize or poorly managed. This businessman needs to stop writing checks without having plenty of cash in the account. I have been given bad checks from customers who insisted that they had the money in their account but that the bank had made a mistake. Banks are not perfect but they seldom make monetary mistakes.

I am a long way from perfect but I am not fool enough to rant about something where I am the stupid one.
 
This is only a problem on rare occasions, I get what you are saying,and that WOULD work, but I am still reluctant to start down that road. Cash flow crunches always come from accounts recieveable , and human nature. Customer A promises to pay on said date but doesn't, Customer B forgets his checkbook, but will mail a check, funny, but it takes him 60 days to find his checkbook and the mailbox. Customer C asks for a payment plan AFTER work is completed. Customer D wants to post date a check, or plain bounces his check. Customer E goes on vacation for 2 weeks and will pay when he gets back,etc , etc. It doesn t happen often, but there are times these customers all line up at once, and I have money invested in each job. My suppliers want to get paid on time, the result is a lean checkbook... I could get more hard nosed about collecting on time too.
 
Mike after reading more of this I think you need to change your accounts receivable practice. Here is an example: a friend was in the fire wood business and in the same boat as you. He went to "pay before delivery" Come in to office pay cash, check, credit card etc. Then he delivered wood. Yes he lost a few customers THEY WERE NOT MUCH OF A LOSS AND HIS ACCOUNTS DUE IN WENT TO ZERO!!! SEVERAL OTHER OUTFITS I KNOW DID SIMILAR TO COMBAT THIS ISSUE Like requiring a credit card to bill or a pre payment. THINK THIS OVER.
 
Well, Mike, I think you have opened a new can of worms with your last post. I would suggest a different approach- take in the work and determine exactly what is needed, price the parts, delivered plus a reasonable mark-up. Call customer to say "I need $X for the parts for your repair. WHEN you pay, I'll order them and move on." If they back out, you are only out the cost of the time you have invested for research, hand them back the unit in a box. Of course, your super regulars don't need that treatment, or the ones you have stuff on hand for. Just the new-to-you customers or the extra big parts cost jobs. You can even be clear "I am pretty sure we don't need anything else, but will call you if I have to order anything extra, just for confirmation, not pay first". Jobs may sit around the shop for a few extra days, but no new parts will. Maybe it is even best to make it universal- the best of customers has lost his checkbook before, as well. Let the parts delivery add to your float time AND cut the labor cost of repairs out of the float picture all together.

Or, use a credit card/operating loan to buy the parts.

Back when I ran a small business, two weeks was my limit on lack of payment. After that, I was on them like stink on a pig. Had a retired deputy chase one or two for me, and only got straight-up beat by one guy in 17 years. We lost money on many jobs, but not because they did not pay us what we billed, but because we didn't bill what the job was worth. (My partner had a soft heart for old ladies, we did jobs at 50% price, on the brand-new Cadillac they just paid cash for...)
 
(quoted from post at 02:04:24 02/08/17) I would be a much bigger fan of his if he would publish what investments he has that are consistently making 10% every year. He gives so much "advice" based on that claim but I have only made 10% twice in over 25 years of investing - 2008 and 2009.
Click to expand...

Closed end bonds... Its out there but you got to have money to get into that type of investment. You have to be willing to let it set for 10 years before you start to draw off of the interest.
 
(quoted from post at 10:32:36 02/07/17) Overnight, banks run through debits from your account then they run deposits to the account. The bank does this in this order in hopes of collecting overdraft fees(big money maker for banks).

Years ago, Government tried to pass legislation to have banks reverse the order of debit/credit but the banks lobbied hard and won.
Click to expand...

^^ This. Banks always transact debits first. Credits to your acct come later - maybe much later.
 
You must log in or register to reply here.

Similar threads

B
Farmall 656 Gas no spark, has power to coil
Replies
7
Views
410
wore out
wore out
MarkB_MI
Is that trailer battery getting charged?
Replies
15
Views
728
MarkB_MI
MarkB_MI
super99
USPS Rant
2
Replies
30
Views
3K
Steven Allen
S
S
All sudden a fuse blows question
Replies
15
Views
629
BarnyardEngineering
BarnyardEngineering
jm.
South East Missouri information
Replies
10
Views
1K
Steven Allen
S
Tractor Parts Tractor Manuals

We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today.

Copyright © 1997-2024 Yesterday's Tractor Co.

All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.

Yesterday's Tractors - Antique Tractor Headquarters
Website Accessibility Policy

Back
Top