Dedicated to Deposits: Deals, Data, and Discussion

3 Tips from the OCC's Website, Help With My Bank


The Office of the Comptroller of the Currency (OCC) has a resource called helpwithmybank.com to help deal with problems you may have with your bank. This is specifically for national banks which are chartered and regulated by the OCC. However, the information is likely to still be relevant for other banks and for credit unions. In the website's FAQs I've found 3 that are related to issues that I've seen many people complain about.

When can a bank close a checking account?

In the years in writing this blog, many readers have had their checking or savings accounts closed for apparently no good reason. Here's the FAQ on this:
The bank closed my checking account and did not notify me. Is this legal?

Yes. Generally, national banks may close deposit accounts for any reason (e.g., inactivity or low usage) and without notice. Federal banking laws and regulation do not address the closing of deposit accounts.

This issue is governed by the Deposit Account Agreement you received when you opened your account. Review that Agreement, and contact your bank directly for more information.

This may be a good reason to have at least two checking accounts. If a bank does close your account, you can fall back on the other one. You could always open a new one when you need to, but you might have to deal with initial holds that could cause inconvenience.

Does a bank have to pay interest after a CD matures

The other useful FAQ has to due with certificates of deposit and when they mature. Most CDs are set up so they automatically renew at maturity. The new CD will have a new rate decided by the bank. At the time the CD matures, you can just let it automatically renew. But you have to be careful about this since the new CD may have a low rate. It's often better to close a CD, withdraw all the funds and use the funds for a CD at another bank.

CDs typically have grace periods when they mature. This a period of 5 to 20 days in which you are allowed to close the CD and withdraw the funds without penalty. Before the CD matures, any withdrawal triggers an early withdrawal penalty.

If the grace period is 14 days and you decide to close it on day 12, what interest rate will you receive during these 12 days? For many banks it may be zero, and this is allowed as explained by this FAQ:
Does the bank have to continue to pay interest on my Time Certificate of Deposit (CD) after it matures?

Not necessarily. If you choose to roll over/renew the time certificate of deposit (CD) for another term at the bank, the bank can continue to pay the interest.

Let's say you haven't decided in advance. Once the CD matures, you have 10 days to decide whether to renew or withdraw the funds. The bank can continue to pay interest until you decide, but it's entirely up to the bank.

You may want to review your Account Agreement, which explains if interest is paid after maturity. You should have received this Agreement when you opened the account.

How long can a hold time be?

Another issue that irks many people is the hold time that banks place on your money after you deposit a check or make an electronic deposit. During this hold time, you're unable to have access to the money. It's still earning interest, but you can't withdraw it or use it to pay bills.

Unfortunately, the government gives banks a lot of leeway on hold times for deposits over $5,000. From this FAQ

I deposited $10,000 to my account. When will the funds be available for withdrawal?

For deposits in excess of $5,000, banking laws and regulations allow for exceptions to the availability of funds. Exception holds include deposits over $5,000 which may be applied to any deposit of checks (including official checks) to any and all account(s) where the aggregate amount of the checks deposited on a banking day exceeds $5,000.

The hold may be placed only on the amount deposited in excess of $5,000; thus, the first $5,000 must be made available consistent with the bank's normal availability schedule.

When the large deposit exception is applied, the bank may extend the time periods established under the availability schedule by a reasonable period of time. According to the banking regulations, reasonable periods of time include an extension of up to five business days for local checks and six business days for non-local checks. However, under certain circumstances, a longer extension may be reasonable.

In addition, the account agreement you received when you opened the account should explain the availability process.

If you find any other FAQs at this OCC website useful, please leave a comment.


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