banking question

[steve2470]

I have online banking with a traditional bricks and mortar bank, and a savings account with an "internet only" bank in DE. It always amazes me, in this day and age, that it takes 2 or 3 business days to transfer money between banks. Can't they do this overnight via satellite ? That's what I've always read. Thanks in advance.

[mattclearing]

1. Most can do it overnight. Many same day if you initiate it in the AM.

One of your banks is really lazy.

[steve2470]

4. I think WAMU is the lazy one. Capital One is also lazy nt

[slackmaster]

2. Many transfers still done on reel-to-reel tapes

Hard to believe in 2005, but that's how things are still done.

See http://www.nacha.org

[ronnykmarshall]

6. Que?

I work for a big bank and we haven't used reel to reel tapes since the early 1990's.

But I've noticed this same issue with ING.

I have savings with them and it takes a couple of business days to transfer.

[slackmaster]

9. Least common denominator

Some banks, insurance companies, and a LOT of government agencies still use them (e.g. assessor and tax collector offices of podunk counties), therefore the performance expectation of the whole system has to be kept down.

It will get better within a few years.

[ret5hd]

3. yeah, but then they don't get to use your money (along with 1000's...

of other peoples) for free for those two days.

it's kinda like that story where some bank employees rigged the software to take all the 'fractions of a cent' in interest and deposit it into their own account.

[tjwmason]

5. This is a major issue over here in the U.K. too

The banks still allow for 3 days clearing between accounts even when we're talking about internet transfers.

The problem is that the structure for transfering money between banks is still the old BACS devised for the days of cheques. To change this would take an agreement between all of the banks, and a wholesale change. It's overdue though, and is likely to arrive in the not too distant future.

I do notice that when I take cash out from a bank other than my own's hole-in-the-wall my bank still nabs my cash pretty damn quick.

[ronnykmarshall]

7. What's so lame about this ...

we just passed "Check 21" here in the states, which enables banks to be "exchange partners" .... that means images of checks are transmitted between banks.

In other words, a check drawn on a east coast bank and deposited in a bank in the west coast clear the at the east coast bank the same day.

NOW, the next step is for the Federal Reserve to ease up the hold periods for deposited checks.

[Aristus]

8. I used to work for a bank and I have no evidence of this, but

I wonder if the 2-3 day delay might not be because the bank takes the funds, sticks them into their own general fund to accumulate a few days worth of interest off the total capital sum, and then transfers the funds along to the destination bank. Do that with every single transfer, no matter how small, every day, day in and day out, and you can generate a lot of "free" interest income for the bank.

Am I wrong? :tinfoilhat:

[NV Whino]

10. Sounds about right to me

Banks need to make money. We get free checking accounts (in some banks), they get the two-day interest.

[KitchenWitch]

11. Sounds about right to me

I have always wondered, in this day and age of lightening fast computer processors, why some banks still have that "Deposits made after ____ PM will be posted to the next business day". Why can't the deposit be credited in real time, like POS transactions and checks???