Timing Of Deposits And Transfers To Accrue Fees

Please explain how you know Bank of America is processing credits and debits at the end of the day any differently than what I'm familiar with:  credits get processed first, debits second.  Thanks.

One thing I like about DepositAccounts.com is the lack of political discussion.  Please don't ruin this by using your posts as a political soapbox.  There are plenty of other Web sites where you can vent to your heart's content.  Thanks again.

Here's what Bank of America says about how it processes credits and debits:

To calculate your Available Balance  , we

• Take the amount of funds in your account at the end of the previous business day
• Add any cash deposits we received that day
• Add the immediately-available portion of check deposits and other credits we received that day
• Subtract checks and other debits we received that day

Remember, if we put a hold  on a deposit you made, the funds from that deposit won't be available to you until the hold expires. Also, note: when positing debits we generally post higher-dollar items before lower-dollar times. This gives priority to the payment of high-collar debits like your mortgage or insurance premium.

 

Please provide a source for your information.

Some banks have been sued and had to pay for taking the larger checks first. I think  Fifth Third was one. They have to now pay checks as they are presented. The excuse of taking the larger checks first was just a way to get more NSF charges. I thought maybe the rules were changed for all. Guess not.

I agree - no politics, but it bothers the heck out of me that we have 4 or 5 mega-banks that control 75% of all the deposits in the country and pay miniscule rates to depositers. For the life of me I don't understand how we let these banks get so big, particularly when everyone was so concerned with "too big to fail" after the credit crisis. This present govt. talked a good game and then proceeded to allow them to triple their size. If they really want to reform the system, break them up.

I've noticed several banks do the same thing: post debit first then the credit.  For example, my day 1 ending balance was $15k, on day 2 i had two transactions - a deposit of 16k in the AM, and a check payment of $15.5k in the PM.  The bank recorded the day 2 transactions as such:  debit $15.5k -> debit $35 NSF -> credit $16k.  This happened in one of my reward checking accounts a month ago, and i'm not going to name the bank here.       

I just checked my online banking info, and noticed that since December, BofA seems to be processing debits first and credits second, and the debits are ordered from smallest to largest.  I believe the bank used to process credits first, then debits, but in order of largest to smallest.  Perhaps this is BofA's answer to the new banking laws?

FWIW, I also just checked my TD Bank account, and that bank does the same exact thing in the same order.

Of course, this all does not really matter.  What matters is your actual (or available) balance at the end of the business day.  If your balance goes below $0, then up again, all within one business day, the bank should not charge an overdraft fee (unless I'm mistaken).

(Sorry for the numerous posts....)

On second thought, I just checked my BofA account going way back (to January 2010 and earlier), and it's been posting transactions in the same manner since I've had the account (debits, lowest to highest, then credits).  Nothing new here apparently.

(Sorry for the numerous posts....)

On second thought, I just checked my BofA account going way back (to January 2010 and earlier), and it's been posting transactions in the same manner since I've had the account (debits, lowest to highest, then credits).  Nothing new here apparently.

That's very interesting, because I'm looking at my checking account right now via Online Banking, and here's the sequence I see with a posting date of 12/31.  Note that I'm reading from bottom to top, because the transactions are in descending date, descending processing sequence within date order.  That's how the running total is accumulated. 

1.  Deposit from a mailed check

2.  Wire transfer in

3.  ATM deposit

4.  Online Banking payment

5.  Check from checking account

6.  Wire transfer fee

Items 1, 2, and 3 (credits) are not in amount order.  Items 4, 5, and 6 (debits) are in descending amount order, i.e. largest to smallest.  This is consistent with how BoA describes processing of credits first, then debits, from largest debit to smallest debit.  See my prior post in this topic.

(Sorry for the numerous posts....)

On second thought, I just checked my BofA account going way back (to January 2010 and earlier), and it's been posting transactions in the same manner since I've had the account (debits, lowest to highest, then credits).  Nothing new here apparently.

That's very interesting, because I'm looking at my checking account right now via Online Banking, and here's the sequence I see with a posting date of 12/31.  Note that I'm reading from bottom to top, because the transactions are in descending date, descending processing sequence within date order.  That's how the running total is accumulated. 

1.  Deposit from a mailed check

2.  Wire transfer in

3.  ATM deposit

4.  Online Banking payment

5.  Check from checking account

6.  Wire transfer fee

Items 1, 2, and 3 (credits) are not in amount order.  Items 4, 5, and 6 (debits) are in descending amount order, i.e. largest to smallest.  This is consistent with how BoA describes processing of credits first, then debits, from largest debit to smallest debit.  See my prior post in this topic.

I may be wrong, but while dates are in order from bottom to top the way it's listed, I figure each date's transactions are in top to bottom order (as are the pending transactions).

(Sorry for the numerous posts....)

On second thought, I just checked my BofA account going way back (to January 2010 and earlier), and it's been posting transactions in the same manner since I've had the account (debits, lowest to highest, then credits).  Nothing new here apparently.

That's very interesting, because I'm looking at my checking account right now via Online Banking, and here's the sequence I see with a posting date of 12/31.  Note that I'm reading from bottom to top, because the transactions are in descending date, descending processing sequence within date order.  That's how the running total is accumulated. 

1.  Deposit from a mailed check

2.  Wire transfer in

3.  ATM deposit

4.  Online Banking payment

5.  Check from checking account

6.  Wire transfer fee

Items 1, 2, and 3 (credits) are not in amount order.  Items 4, 5, and 6 (debits) are in descending amount order, i.e. largest to smallest.  This is consistent with how BoA describes processing of credits first, then debits, from largest debit to smallest debit.  See my prior post in this topic.

I may be wrong, but while dates are in order from bottom to top the way it's listed, I figure each date's transactions are in top to bottom order (as are the pending transactions).

I'd forget about pending transactions that haven't posted yet.  Just look at posted transactions.  The running total goes from the bottom of the screen to the top of the screen.  That's the order in which the posted transactions were processed.

Pending transactions will eventually show the credits-first-debits-from large-to-small order when they post.

Certain things are a matter of opinion, and might or might not be appropriate to post in DepositAccounts.com.  OP's post was both factually incorrect (at least according to BoA's stated policy and my and apparently others' experience) and contained a political rant that IMO doesn't accomplish anything.

Lou's comment about the major banks paying minuscule interest rates is an interestinjg topic/debate in its own right.  FWIW, I think it's the FOMC (part of the Federal Reserve Bord) policy of keeping the Federal Funds Rate extremely low, descending to 0% - 0.25% that's been in place since December 16, 2008, that has been the greatest factor in the low deposit rates we have been experiencing for some time.  See this history of the Federal Funds and Discount Rate.

When the Federal Funds Rate was at a much higher level, say 3.5 years ago, so were interest rates at even some of the major banks.  Ironically, BoA had probably the highest rate of a major bank -- 5% and above -- for some of its affinity-based products, such as its NEA MMA or Defenders of Wildlife MMA.  This isn't meant to be an advertisement for BoA, but even now, the BoA NEA MMA shows the following yields (based on the Average 1-month LIBOR):

0.75% APY for balances < $500

1.15% APY for balances >= $500, < $50,000

1.25% APY for balances $50,000+

For new accounts, the first 60 days has a 1%  bonus rate added to the above.

Most of my funds are in RCAs (reward checking accounts), but some are in my NEA MMA.  Sorry for the overlong post.

Fair enough.  I guess I was reading it backwards.  Then in that case, everything was and is still how I thought it's always been, which is credits first, then debits, largest to smallest.  Nothing new at all (to original poster).

I have been retired for a couple of years but when I was working most banks and credit unions including the one that I worked at would not allow the check you deposited to be used for checks coming in on the same business day unless the check was drawn on the same institution. If the deposit was cash or a check drawn on the same institution the funds were available immediately. When a check was drawn on a different institution the funds were available the next business day but that did not guarantee the check was good. Now that I am not working I don't know the rules.

FWIW, I also just checked my TD Bank account, and that bank does the same exact thing in the same order.

Of course, this all does not really matter.  What matters is your actual (or available) balance at the end of the business day.  If your balance goes below $0, then up again, all within one business day, the bank should not charge an overdraft fee (unless I'm mistaken).

 

Didn't you see my post above?  The bank charged me $35 NSF even though my end of the day balance was over $15k (another words, the net transaction within that business day was positive). 

#4

day 1 ending balance was $15k, on day 2 i had two transactions - a deposit of 16k in the AM, and a check payment of $15.5k in the PM.  The bank recorded the day 2 transactions as such:  debit $15.5k -> debit $35 NSF -> credit $16k.  This happened in one of my reward checking accounts a month ago, and i'm not going

You need to read the disclosure that was presented to you when you opened the account. When you deposited the check that morning, the funds are not available for you to use until the next day or later unless the check was drawn on the bank that you deposited it in and those funds are available. The available balance is what is pertinent here. Just like when you use your debit card. The money is put on hold in your account immediately even though the store has not ran the debits yet and those funds are not available for use. Some banks do not give you credit for your deposit for 3 days. If the check is large or out of the area they might put a hold on it for up to 7 to 10 days. They do have to give you a notice at the window if done in the branch if there is a longer hold or thru the mail if the deposit is done at the ATM. I had a local cashier check put on hold for 3 weeks a year or two ago. Never heard of that. In fact I thought the first $5,000 of a cashier check had to be made available. I did not follow thru because I was not using the funds so it really did not matter. Even when you are given credit the following day for a check it may come back NSF and you have to realize this.

I had not seen glxpass response to my post until today. Yes, the main reason for low rates has been a Fed Funds Rate of 0 -.25%. However, if a few banks control the majority of deposits in this country, they will have no reason to pay competitive rates if there isn't any real competition to speak of. Notwithstanding B of A affinity accounts, which were not well known to the public, the mega banks have a history of paying non-competitive rates to their depositers. I truly think depositers would have been better served if these few banks were not allowed to acquire these deposits to effectively give them monopoly power to price these deposits below the market. 

It is not a matter of the gov't allowing banks to grow too big, it's a matter of too many uninformed consumers choosing to do business with these megabanks not realizing the consequences of their actions.

If we want to stop the megabanks, then we the depositors (the ones with the money) need to choose other banks.

As a start I suggest that we all just decide not to use the megabanks anymore (Chase, Citi, B of A, Wells Fargo/Wachovia, US Bank, and PNC). If everyone that was concerned pulled all their money out of these banks, it would make a difference.

#16:  I use B of A here in Boston where it is by far the most prevalent bank.  I also never, ever pay a fee for any standard transactions of any sort (with the exception of the obvious, such as cashier's checks).

Since B of A introduced the new "packages," the Enhanced has been perfect and I was able to convert my old MyAccess (soon to be no longer free), crappy savings, and credit card into that.  Now, all I have to do is make ONE transaction a month on the credit card and my checking AND money market savings are fee-free.

Compared to the other mega banks here, this is actually the best deal for what I have.  Citizens and Sovereign and TD all changed their offerings for the worse as well.

As for the mega banks hurting from people who read this blog leaving, well, that's not likely to be the case.  People on this blog most likely do not pay banks fees, as we know better.  The banks will still thrive on the uninformed fee-feeding customers they prefer to prey on already.

Again, I don't exactly love B of A, but with the branch and ATM presence and my fee-free "package," I'm not paying them anything.  (FWIW, I keep most my savings in an Alliant CU account.)