It has come to my attention that Quorum FCU is quietly enforcing a policy that no interest accrues on a deposit on the first day of deposit if the deposit was made after 3 p.m. Eastern Time.
Nothing about this is anywhere in their Truth in Savings disclosure. In fact, that disclosure addresses matters by saying only:
2.(I added the bold face and italics.) There's nothing in there or any place else in the disclosures about the 3 p.m. cutoff. It simply says if you make the deposit that day, you get the interest from day of deposit. But in reality, Quorum is posting the deposit that day but it is not starting to accrue interest on it until a day later.
The Credit Union uses the daily balance method to calculate dividends. This method applies the applicable daily periodic rate to the balance in the account each day. Dividends accrue on a 365-day basis beginning on the date of deposit and ending on the date of withdrawal. Dividends are accrued daily and compounded and posted monthly unless specified in product disclosures sent at the time of account opening. Paid dividends remaining on deposit will earn dividends at the same rate on the same terms. Any accrued dividends not yet posted will be forfeited if any account is closed. Current dividend rates and balance requirements to open accounts and earn dividends are disclosed on the Credit Union Rate Sheet. Federal Law prohibits the guarantee of dividends since dividends are based on available earnings at the end of the dividend period.
You can see the Truth in Savings disclosure here.
I realized this by accident, by having a sizeable enough deposit in my savings account for one day and then withdrawing it the next, and otherwise having nothing but the minimum in that particular account. I should have had interest on it for the one day. But my monthly statement shows no interest.
I brought it to Quorum's attention. My query was referred by a supervisor to "management," and I had to wait a week for an answer. I got the reply that deposits received after 3 p.m. are posted that same day (as I saw on my account) but no interest starts to accrue until the next day. As a customer service rep put it, "That is just the posting day, the deposit day is the next day." !! They did give me the interest as a good will gesture for this one time -- it amounted to less than a dollar; I was more concerned about the practice than the small change for this one item.
I am a bit alarmed, as gee, this could hit a LOT of people and in the aggregate amount to a lot of money. And while any one isolated deposit by an individual, and especially at today's interest rates, might not be big time, over 25 deposits, 50 deposits, 100 deposits over months or years, it adds up to some nice numbers.
In my case, the deposit was made via the ACH by a third party -- and Quorum said it came in after 3 p.m., although I have no way of knowing and, frankly, had thought it came in overnight and was there when they opened. For all I know, it came in hours earlier but only got posted after 3 p.m. - I never see my online transactions at Quorum posted when I make them, they get posted later in the day, as this one apparently was. I have no way to know; but that is not the point.
Frankly, I think this practice of their's is illegal if not at least disclosed in their Truth in Savings disclosures. And I told them it should be in there if they want to do it, but two business days later, I still have not heard back about whether they will add it.
ADDITIONALLY, note in that clause above: You also lose all interest accrued but not yet posted if you close an account before the interest is posted. This means that if you close the account one day before the statement closing and posting for that month, you would lose that entire month of accrued interest. (I have seen this practice at other banks, in particular at Hudson City Bank.) But at least this is in the disclosures, unlike the 3 p.m. deadline for deposits. But of special interest to people at this Website, note this means that if you close a CD some days into a grace period after maturity, you will get no interest for those number of days of the grace period if you choose to close the CD. Close on the maturity date or you lose earnings.