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Posting-Version: version Vortex 1.1 8/4/83; site vortex.UUCP
Path: utzoo!linus!decvax!vortex!lauren
From: lauren@vortex.UUCP (Lauren Weinstein)
Newsgroups: net.flame
Subject: banks
Message-ID: <101@vortex.UUCP>
Date: Tue, 16-Aug-83 03:19:53 EDT
Article-I.D.: vortex.101
Posted: Tue Aug 16 03:19:53 1983
Date-Received: Wed, 17-Aug-83 05:24:16 EDT
Organization: Vortex Technology, Los Angeles
Lines: 30


The issues regarding bank check clearing are actually a bit more
complicated.  Most banks "credit" your account for new deposits
on the same day (or the following day) of the deposit, but they
also always place a "hold" on the account for the amount of the
deposit (unless it was cash or a transfer from another account at
that same bank) until the designated "float" (timeout) period for the
deposit "bounce" has occurred.  If the deposit bounces, they debit the
account.  Until the timeout occurs, you may *not* use those funds --
the "hold" prevents you from using any funds that have not yet "cleared".
Of course, if you have $200 in an account, and deposit a check for another
$200, you can still withdraw up to $200... but you can't get at that
other $200 until it "clears".  

Different institutions specify different "timeout" periods.  The period
is usually artificially long to give the banks more time with their
hands on your bucks (earning money) before you can use it.

Note that the term "bank" is being used above rather broadly.  In practice,
actual commercial banks (e.g. Bank of America) will generally have
shorter deposit "timeout" intervals than Savings and Loans -- sometimes
drastically shorter.  

--Lauren--

P.S.  Another reason for the float period is to provide the writer
of a check a chance to "stop clearance" of the check under certain
conditions (such as non-delivery of goods shortly after payment, etc.)

--LW--