On-line Banking

[earllogjam]

Is it legal for an internet bank to float money that is being transfered into and out of your on-line account?

I have an internet bank account that I shuffle money into and linked to my regular bank. I have noticed that it takes an inordinate amount of time for money to be deposited into my internet bank account, sometimes more than 7 days from when the money is actually registered as withdrawn from my regular checking account. I always thought electronic wire transfers were instantaneous.

It is a quicker in the reverse when I am transfering funds from my internet bank to my regular checking account. It takes about 3 days for the funds to be deposited into my regular checking account, which leads me to think that my internet bank is deliberately floating money.

Is this standard procedure for most internet banking accounts?

 

[Pecker]

Some banks are better at service than others. Most of them, though, know how to milk every dime out of transactions.

I'd suggest finding another brick and mortar bank. Talk to several and ask them how they handle transfers to other bank accounts, including online accounts.

 

[Osiris]

I used to use PayPal, but my regular bank account has such a good internet banking entity, I stopped and just use my bank for everything. I just maintain two accounts and shuttle from within my bank as it is an instant transferal of funds.

 

[dreamer20]

I have noticed that it takes an inordinate amount of time for money to be deposited into my internet bank account, sometimes more than 7 days from when the money is actually registered as withdrawn from my regular checking account. I always thought electronic wire transfers were instantaneous.

Is this standard procedure for most internet banking accounts?

As Pecker has said there are banks that give better service than others. You should see if your bank has written terms and conditions regarding the time it takes for such transfers. Deposited cheques do take longer to clear than cash deposits. If the funds are already in your accounts I don't see why it would take much longer for a transfer in the opposite direction between your accounts. Seek an explanation form your bank.

 

[Quite Irate]

I'd ditch that service.

I don't use a regular bank, though, so I don't have that type of problem anymore. My boyfriend set up a bank service for his employees, and I use it all the time. I get the best rates.

 

[SpeedoGuy]

I bank with a big name US bank. I get direct deposit, a debit-ATM card, and online banking with all the frills. It works for me.

 

[dong20]

It's not much better here in the UK although the banking industry is more...'integrated' (at least from my scant experience of US banking). It can still take 3 days or more to get money between banks or clear a cheque.

There are shortcuts (which, naturally cost) and my personal and business banking are with the same bank mainly to save those 3 days. Following many complaints about this and other things some accounts with some banks will now pay interest on deposited cheques immediately.

 

[EagleCowboy]

Some banks and businesses (like wally-world) will put a "hold" on the funds. Which means it comes out of your account (or theirs), but not really right then, and gets put into a cash account set up for them (along with everyone else's money coming in or going out) and they make a lot of interest off of your money without legally having to pay you for using your money after they've already made money off of you the first time around. Sometimes wally-world will put a "double hold" (twice the original amount) on your money, which means they've effectively locked up the second amount so you can't use it, they collect the interest off of it, then release it back to you.

It goes something like this:

You buy a DVD player at wally-world.
They've made a nice little profit off the DVD player that you bought.
You bought that DVD player with your debit/credit card.
Wally-world puts a hold on the amount spent on that player. Your account shows that the money is still there but the available balance is less than the amount in that account.
The "held" money is in a "virtual" cash account now collecting interest for them and not you, but it's still in your account. THEN it finally goes to their account. Your bank may be playing the same game as well. I know Chase bank is real bad about it.

Otherwise, all the transactions could be instantaneous.

I made my bank bar all holds. If the businesses like wally-world don't take the money out right then, or by the very next business day, they just don't get it. I've also gotten to where I just pay in cash as much as possible so that I can earn the interest off of my money as long as possible and not someone else.

 

[dong20]

Sometimes wally-world will put a "double hold" (twice the original amount) on your money, which means they've effectively locked up the second amount so you can't use it, they collect the interest off of it, then release it back to you.

I agree, it's a scandal that banks only pay interest on cleared balances, after all the money has not left your account, and has certainly not arrived in WW's. In the case of a double hold??? (which for a retail purchase seems entirely implausible as it never will) it's especially so.

Otherwise, all the transactions could be instantaneous.

In effect they are (at least authorised ones), the change may not be reflected in your balance but it's no longer available to you. By the same token it's not yet available to WW (for example).

As you say, the only winners are the banks and CC companies. WW don't get interest on funds they do not yet have, you don't get interest on those funds either - the banks do while they process the transaction. Gits!

I ran into a related problem many times when I've been in the US (especially but it happens elsewhere too) when staying in hotels. A card swipe is taken but not for a nominal amount to verify the card isn't stolen but for the whole potential bill (and, often then some).

This authorisation lasts 3-5 days before dropping off. When paying the bill on check out the final bill is also authorised again, thus potentially tying up twice the amount (after 3-5 days). If you travel around this can max out your card really fast with authorisations! I used to use two cards, one for initial swipe one for final payment, it pissed them off but meant I didn't get transactions declined. Years back credit limits were low and I only had one card!

I made my bank bar all holds. If the businesses like wally-world don't take the money out right then, or by the very next business day, they just don't get it. I've also gotten to where I just pay in cash as much as possible so that I can earn the interest off of my money as long as possible and not someone else.

I suppose that works if the bank is able to distinguish between an 'authorisation' and a sale. If not doesn't that cause transactions to be declined? If you were renting a car for example would you not be refused because it's assumed you have no funds?

If a payment is authorised (at least in the UK and according to what I understand about CC rules) there is no way to stop it, regardless of how long it is until presented.

 

[EagleCowboy]

In the case of WW, my card is almost always declined there now that there's no holds allowed of any kind on my accounts. Not always, though.

When I went to rent a car a few weeks ago, I knew just how many days I would need it, plus insurance, and no gas. They figured out the total cost and the card went through with no problems.

But, I have yet to find a place that won't take cash with a smile.

 

[SpeedoGuy]

This authorisation lasts 3-5 days before dropping off. When paying the bill on check out the final bill is also authorised again, thus potentially tying up twice the amount (after 3-5 days). If you travel around this can max out your card really fast with authorisations!

This happened to me earlier this year with some expensive travel I was required to do on business. I was forced to use my own credit card because my business credit card had been maxed out.

I don't mind collecting the miles and other benefits from using my own card while on business travel. What I do mind is the raft of extra paperwork I must submit to justify the use of my own card through no fault of my own.

 

[B_NineInchCock_160IQ]

It is instantaneous, but most banks still have a delay. It used to take a lot more time for transfers to go through, with the advent of computerization the delay is no longer practically necessary, but it gives the banks an opportunity to charge you extra if you're in a hurry and make interest off of your money.

 

[silvertriumph2]

Earl, in my case I don't think it is the Internet bank, but my brick and morter bank. No matter who I transfer to, it takes longer from my bank
to another place, than the otherway around. I just spent about 45 minutes today talking about this with my bank. All I get is a run around.

I told them today that if things don't change, that I will transfer to another bank. So far, since I returned home, I have had 2 calls from people at the bank asking what they can do for me.....it's simple....let me have my money in time! HSBC is for the birds!

 

[earllogjam]

It is instantaneous, but most banks still have a delay. It used to take a lot more time for transfers to go through, with the advent of computerization the delay is no longer practically necessary, but it gives the banks an opportunity to charge you extra if you're in a hurry and make interest off of your money.

That is exactly what I suspected. But I wonder if floating money is illegal. I suspect not since nickel and dime-ing account holders is par for the course these days as banks struggle to compete with more lucrative investment vehicles other than savings accounts and CD's in this time of historic low interest rates.

Earl, in my case I don't think it is the Internet bank, but my brick and morter bank. No matter who I transfer to, it takes longer from my bank
to another place, than the otherway around. I just spent about 45 minutes today talking about this with my bank. All I get is a run around.

I told them today that if things don't change, that I will transfer to another bank. So far, since I returned home, I have had 2 calls from people at the bank asking what they can do for me.....it's simple....let me have my money in time! HSBC is for the birds!

I've had the same converation and run around with my Internet Bank. It makes me wonder if they are having some sub-prime loan problems in their portfolio and it is time to fly the coop. Seems like it's consumer beware for all these shady new internet banks. I'm not sure the higher interest rates on line are much higher these days especially now as all the rates are dropping, and soon to drop more.

My online brokerages who have been around longer are fairly responsive. I don't have any problems with them.