August 6, 2024 • 20 mins
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If you had a million dollar check, what would you do with it? Coast into the drive-thru at your bank to deposit it? That's what a top tennis player attempted to do a few years ago. Why could attempting this be problematic? You'll have to listen to find out!
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Hosted by Drew Thomas and Jeffrey Matevish
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DISCLAIMER
This podcast focuses on having valuable conversations on various topics related to banking and financial health. The podcast is grounded in having open conversations with professionals and experts, with the goal of helping to take some of the mystery out of financial and related topics; as learning about financial products and services can help you make more informed financial decisions. Please keep in mind that the information contained within this podcast, and any resources available for download from our website or other resources relating to Bank Chats is not intended, and should not be understood or interpreted to be, financial advice. The hosts, guests, and production staff of Bank Chats expressly recommend that you seek advice from a trusted financial professional before making financial decisions. The hosts of Bank Chats are not attorneys, accountants, or financial advisors, and the program is simply intended as one source of information. The podcast is not a substitute for a financial professional who is aware of the facts and circumstances of your individual situation. AmeriServ Presents: Bank Chats is produced and distributed by AmeriServ Financial, Incorporated.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Drew Thomas (00:12):
All right, so we are back. Back, still here, I
don't know. It depends on howyou look at it, with another
episode of Bank Chats, 2 Cents,with Jeff Matevish.
Jeff Matevish (00:21):
Hey Drew.
Drew Thomas (00:22):
And myself, of course, and just the two of us
today. As is typical with BankChats 2 Cents, right? Yep. Yep.
So, you found an article, I'mgoing to let you explain the
article. Okay. And then we'regoing to talk about the article.
I'm going to make some jokes,just say, because this article
is a little bit ridiculous onthe surface level, but I think
there's stuff in there that isworth going through. Sure. Yeah.
(00:45):
So, so tell us about thearticle, and then we'll, and
then we'll kind of go fromthere.
Jeff Matevish (00:48):
Okay, so, I was just perusing the internet for
financial news, and...
Drew Thomas (00:53):
As you do.
Jeff Matevish (00:53):
As you do, yeah.
And so there was an episode, aYouTube episode of Hot Ones that
came out. Oh, yeah. Yeah, they,they, it's kind of like this,
but with, with chicken wings andcelebrities.
Drew Thomas (01:06):
So, better.
Jeff Matevish (01:07):
A little bit.
It's better a little bit. Butthey had Serena Williams on, and
one of the the topics they hadtalked about, or that they had
briefly mentioned was that atone point, she had a million
dollar check that she had, had,had won from one of her matches,
and she tried to deposit itthrough the drive thru of her
bank. Gotcha. And they had toldher, you'd better come in for
(01:30):
this one. So, she learned avaluable lesson, I guess this
was years ago. But um, yeah, ifyou have a large check, it's not
as easy as, you know, going upto your depository ATM and
popping it in there anddepositing your check. You know,
there's a little bit moreinvolved.
Drew Thomas (01:46):
Yeah, yeah. So, what? So, did they take her
check? How does the story end?
Like does she take...
Drew and Jeff (01:50):
I mean, that, that's where the story ends. Oh,
that's what I mean. Yeah, thatwas it. So, it had to do with
banking. Yeah.
Drew Thomas (01:57):
Yeah. So, I when you told me this, my first
reaction was, how awful forSerena Williams that she's
driving around with a milliondollar check in her car and just
forgotten it existed.
Jeff Matevish (02:07):
Yeah, that's a great problem to have.
Drew Thomas (02:09):
I mean, seriously.
Yeah. But then, and then on awhim, we're like, oh, well,
since I'm driving by, I'll justgo ahead and pop through the
drive thru and deposit mymillion dollar check, like it's
nothing, like it's no big deal.
I wish I had these problems.
Yes. Like this. Yeah, this is,you know, I mean, don't get me
wrong, the woman is a fantasticplayer and a fantastic athlete,
and she deserves everything thatshe has. But the, I would, I
(02:30):
would love to be so well offthat I could forget that I had a
million dollar check, that Ihadn't yet deposited. So, okay
so, so all things, you know, I'mdone, I'm done ragging on Serena
Williams now, because I amnobody, she can crush me like a
bug. But it does bring up somegood points in terms of, for
(02:50):
those of us that will never havea million dollar check, right,
it still applies. There are somethings that we can talk about
and dissect this a little bitand talk about why banks do what
they do when it comes to checksand deposits and things like
that. So, I guess the questionis, first of all, I guess based
on the story, the question is,why wouldn't they take the check
through the drive thru?
Jeff Matevish (03:12):
So, normally, you know, if it's a transaction
that's outside of your norm, youknow, they may question it. But
who knows, that could be, youknow, a legitimate transaction
for her, you know.
Drew Thomas (03:22):
Could be. Yeah, it could be pretty typical for her
theoretically, right. But you'reright, the first thing that most
banks are going to want to do isknow their customer. So, if you
know that, hey, this person,whoever it is, is typically
depositing large value checks,and they have an account with
you that they've had in longstanding and it's in good shape,
(03:43):
and it has a relatively equalamount of money in there. This
might not have been a big deal,right? Right. But it's still a
million dollars. I mean, this isa big check. And so the bank has
to protect themselves as well,because in reality, you don't
know. I mean, you assume thatsomebody like Serena Williams is
not trying to conduct fraud, butyou don't you don't know where
(04:04):
she got that check. You know,you may know her but you don't
know where she got the check.
She might have played a charityevent and they wrote her a
novelty check for all you know,right? I mean, it has nothing to
do with her, right. So, the bankhas to be protective of not only
themselves, but also thecustomer, right. Because
ultimately the customer isresponsible, they made the
deposit, they're responsible forthat. If that check bounces, the
bank has to try to recover thatmoney somehow, and the first
(04:27):
thing they're going to do is tryto recover it from the customer
that gave them the bum check.
Yeah. So, these laws, orregulations I should say, they
exist not only to protect thebank but also to protect the
customer. Right? So, probablyone of the first thing that they
did when they asked her to comeinside was they probably looked
at that and they probably lookedat her accounts and did all
their due diligence to make surethat everything seemed on the up
(04:48):
and up. That would be my, thatwould be my guest, I mean I'm,
we're making assumptions herebased on a very small story on a
very much better podcast.
Anyway, so, but my guess is thenafter that they probably put a
hold on the check. So, so haveyou ever had a hold put on a
check?
Jeff Matevish (05:07):
I don't think I've ever tried to deposit a
check large enough that wouldrequire a hold.
Drew Thomas (05:12):
Fair enough.
Jeff Matevish (05:12):
I know what, I have an idea what they are.
Okay, they're gonna hold thecheck to make sure that those
funds are available.
Drew Thomas (05:17):
Yeah, I mean, like, honestly, before I got into
banking, I had no idea that theywould ever hold checks. I just
assumed that when you took acheck to the bank, they just
deposited it into your accountand you went on your way. Yeah.
But there are people that forwhatever reason, whether it's,
um, they get an inheritance, orthey get an insurance payout.
Maybe it's that they got a, Idon't know, some sort of a
windfall, whatever it is, theywon the lottery, they got a big
(05:40):
bonus at work for whatever itis, if somebody brings a check
into the bank and says, well Iwant to deposit this, and it's
outside the norm of their normaldeposit behavior, chances are
the bank's gonna say, well, weneed to put a deposit hold on
this, right. And that can makepeople irritated sometimes,
because it makes you feelsometimes like you're doing
something wrong. Yeah. Yeah, Isee that. Yeah. And I don't
(06:00):
think that that's true. Like, inmost cases, people aren't doing
anything wrong. They're justlegitimately trying to deposit
something that they feel istrue. But in some cases, you
know, that check, you know, thebank wants to make sure that the
funds are actually available,the check doesn't bounce. So,
they can put a hold on it. Nownormally, according to
Regulation CC, okay, most banks,what they'll do is they have to
(06:21):
provide you with $200 of thatdeposit the next business day.
And then traditionally, theremaining amount of the deposit,
whatever it is, by the secondbusiness day.
Jeff Matevish (06:33):
Okay, well, why $200?
Drew Thomas (06:34):
I mean, I don't know, okay, that the regulation
says $200 bucks, I'm, you know,that that's what it is. Probably
because the regulation waswritten at a time when $200 was
a lot more money.
Jeff Matevish (06:44):
Okay, okay, that makes sense.
Drew Thomas (06:45):
Yeah, that's my guess. Okay. But that's the,
that's what the rule says. So,the regulation says $200 the
next business day, the rest ofit the second business day,
okay. Unless there areextenuating circumstances. So, I
went back, and I tried to getsome, some information for you
on what those extenuatingcircumstances might be, like,
why would a bank put a longerhold on a check? So,
(07:06):
traditionally, most banks,they're not gonna be able to do
more than about seven businessdays, which is essentially a
week. And have we ever talkedabout business days?
Jeff Matevish (07:14):
No, no we haven't.
Drew Thomas (07:16):
Explained this.
Jeff Matevish (07:17):
My understanding.
So, a bank can deposit money upto a certain time of the day.
Anything after that time,whether it's during the business
hours is considered to be on thenext business day, correct?
Drew Thomas (07:31):
Yeah. Now, a lot of banks are now going to same day.
Okay. Right. So, that so I mean,rules have changed a little bit
based on like, whenever I firstgotten into banking [inaudible]
years ago. Yeah. Butessentially, yes, so a business
day is going to be a day whenthe bank is normally open for
business. Right. So, that'sgoing to be a Monday through
Friday, traditionally. If it's aholiday, like a Memorial Day, or
(07:53):
Labor Day that falls on aMonday, that is not a business
day. Saturdays, even though somebranches are open on Saturdays
for most banks, that is notconsidered a business day.
Right? So, a business day is aMonday through Friday, normal
working hours, that sort ofthing. So, what people don't
always get is that the nextbusiness day for a deposit might
be if I deposit something, saythrough mobile banking, at 10
(08:16):
o'clock at night, on a Friday,well, most banks are already
closed for the day. So, they'reon Mondays business, which means
the your deposit may not show upuntil Tuesday. So, even though
you're depositing at 10pm,Friday, your money may not show
up in your account until Tuesdaymorning. And yet that's still
(08:36):
considered one business day,right. And then you see, when
you start adding holidays andthings like that into the mix,
sometimes it can be four or fivedays before, even though the
bank considers that one businessday it can be it might be
multiple days, if it goes over aweekend or something like that
it can be calendar days, havesignificantly more than than
(08:56):
business days. So, anyway, I'mjust amazing everybody with my
limited knowledge of banking.
So, back to the holds. So, youcould theoretically put a hold
on the check for up to aboutseven business days. Right. And
normally, those reasons aregoing to be for things like, you
could be a new customer, right?
That could be the first thing.
If we don't know you, because Isaid even with Serena Williams,
(09:17):
like, you know, if they knewher, they knew that she was an
existing customer, longtimecustomer of the bank, they know
her history, they know herrelationship, that goes a long
way toward making the decisionon whether or not you have to
hold a check, right. But ifyou're brand new to the bank,
and you don't, and the bankdoesn't know you, has no idea
what your history is, then theymay place a hold on the check
because they simply don't knowyou. They don't have any history
(09:38):
to go off of, right. Another onewould be a large deposit. So,
checks worth more than, say$5,000, those in excess of the
current value of your account,are more likely to be held.
Jeff Matevish (09:52):
So, so if you can't, if you can't back it if,
if that check bounces or yeah,they'll put a hold on it.
Drew Thomas (09:57):
Yeah, yeah, I mean, really, I mean, so, you know, in
the case of Serena Williams,chances are she had more than a
million dollars in her account,it would be my guess. Yeah.
Unless her accountant is justabsolutely awful. But she might
have accounts in multiple banksas well.
Jeff Matevish (10:11):
Yeah, you know, because that's not necessarily
insured by the FDIC.
Drew Thomas (10:15):
Oh, yeah, we can talk about that. Yeah, that's
good, very excellent point,Jeff. Frequent overdrafts. So,
if an account has a repeatedhistory of overdrafts, banks may
be more likely to place a holdon the check to make sure they
clear before releasing thefunds. I mean, I hate to say it,
but there are people that runreally close to the bone when it
comes to their accounts. And ifthey are traditionally,
(10:36):
habitually over drawing theiraccount, the bank is less likely
to just grant you that depositin the hopes that they get the
money in time for your accountto be considered good, that
you're in good standing. Andthen also checks previously
returned unpaid. So, if you'retrying to deposit a check that
was returned unpaid once ormultiple times before, there's a
(10:59):
stronger chance your bank willwant to validate the check
before making the fundsavailable. It can also even
depend on who the check is beingdrawn on. If it's being drawn on
the same bank as yours, the bankmight be able to look at that
other account and make sure thefunds are actually available.
You know, because they're thesame customer, they're going to
tell you that. Right. Right. Imean, they look into it, they
(11:19):
could look at it and see, okay,well, are there funds available
in this, in this account or not?
Sure. Even that's a little iffy,though. Because if somebody has
written 12 checks in the sameamount, and the account might
look like there's fundsavailable, but maybe they really
aren't, because there's 12checks out there, depends on
which order they come in. Yeah.
But again, if the, you know, ifthe check is from a bank halfway
across the country, they may nothave any clue as to whether or
(11:41):
not that check is good. Okay.
There's also things to consider,like, Is it a, is it a personal
check? Or is it coming from aninsurance company? Is it a, is
it a treasurer's check, orcashier's check that is
basically, guaranteed funds? Doyou know why that's called
guarantee funds? No. So,treasurer's check, or cashier's
check is considered guaranteedfunds, I'm air quoting. For
(12:02):
those of you who can't see thefact that I'm air quoting.
Jeff Matevish (12:05):
Oh, because that's written by the bank.
That's, that's a guaranteedcheck.
Drew Thomas (12:09):
Right from the bank, because it has to be paid
for with cash, okay. So, youcan't write a check for a
cashier's check, you can't use acredit card for a cashier's
check. It has to be fundsavailable in your account,
essentially cash, that you thenget the check from the bank for,
so. So, that kind of a checkmight be a little more prone to
not getting a hold as opposed tosomething else. But even those
(12:30):
can still be held. I mean, thebank, it's the bank's
prerogative, essentially, tolook at all these different
things and make sure it's notfraud. You know, we talked about
money laundering and things likethat, you know, there are people
that will pass a check fromperson to person to person in an
effort to try to make that moneylook good. Or look legitimate,
even though it isn't. So, yougot to be aware of that stuff.
Jeff Matevish (12:51):
So, now, we've been kind of talking about,
we're assuming we're talkingabout kind of personal checking
accounts. Is there anydifference between business to
business or?
Drew and Jeff (13:00):
Not real I really, they can put a hold on?
Sure. Okay. Yeah.
Drew Thomas (13:03):
Yeah, they absolutely can. Again, maybe not
at that value, becausebusinesses oftentimes deal with
much larger dollar values, butit's possible. Sure they could
there they wanted to. So, yeah,so it's understanding the, it's
understanding the regulation andlike, your, your bank cannot
just unilaterally say, well, youknow, we're gonna hold this
check for a month. Like that'swhy Reg[ulation] CC is in place.
(13:25):
It says, it gives you aguideline to say how long a bank
can realistically hold a depositbefore they give you access to
that money. And that was put inplace because there was a time
way, way back. And you know,what we should do? We should do,
I'm digressing again. We shoulddo a 2 Cents or a podcast about
like some of the history ofbanking, because some of the
(13:47):
stuff, these regulations cameabout because of things that
happen. Yeah. And we could, wecan maybe talk about that at
some point too. That might be aninteresting topic. But anyway,
there was a time whenever thebanks could really hold your
check for as long as they wantedto. And that presented all kinds
of problems, you know, forpeople, where they were getting
paychecks, but they weren'tgetting, their checks for
(14:08):
bouncing, bills weren't gettingpaid because the bank was just
lollygagging around not doingtheir job, not depositing the
checks and things.
Jeff Matevish (14:15):
So, it probably played into the you know, people
were not trusting the banks backthen. And like we talked about,
you know, they're not, peoplearen't putting their money in
the banks. Yeah.
Drew Thomas (14:23):
Yeah. Like back in the 20s. And 30s. Yeah, during
the Great Depression and stuff.
Sure. I mean, so yeah, so that'swhy some of these regs exist.
And so it's fine. It's walkingthat fine line between
protecting the bank protectingthe customer, but also doing
right by the customer who's, youknow, 99 out of 100 people are
just trying to go aboutlegitimate business. And you
have to recognize that but thatdoesn't mean that you ignore the
(14:45):
fact that there could be the 1out of 100 chance that there's
fraud or something elsehappening. You got to be aware
of that. You know so, especiallyin today's world, my gosh, we've
had so many conversations aboutcybersecurity, things like that.
But yeah, so anyway, gettingback, you also brought up a good
point about the FDIC. So, whyis, so why else would this be an
issue with this million dollarcheck with Serena?
Jeff Matevish (15:05):
So, you know, when she puts his money in her
bank, a million dollars is notfully insured by the FDIC, only
$250,000 are insured for her,for her, right, right, per
financial institution. So, shemay be better off separating
that into several differentfinancial institutions.
Drew Thomas (15:24):
Or, or there's, there's also different ownership
categories she can look into.
Right. So, if she wanted to opena joint account with me say,
right, okay. Okay. Well, andthen put that money in there,
well, now we are jointly insuredfor $500,000, still only half. I
get $250,000, she gets,$250,000, right. So, there's
there's that option as well.
(15:45):
She's not going to open one withme. Maybe she'd open one with
you? I don't think so. We'd bothhave some explaining to do at
home if we opened an accountwith Serena Williams.
Jeff Matevish (15:54):
Not too much explaining. I think they'd get
over it for half a milliondollars. But yeah.
Drew Thomas (15:58):
Probably, yeah. So, that, so that is an option, too.
But yeah, I mean, you want toalso diversify. And there are
honestly, probably bettervehicles to have a million
dollars in other than a checkingaccount to be perfectly fair.
Whether it's a CD, or some sortof traditional savings vehicle
like that. But also, you know,that gets into talking about,
(16:21):
you know, trust and personaltrust and investments and things
like that, too, that havenothing to do with FDIC
insurance. But in reality isprobably, if you have a trusted
financial adviser, probably abetter place for your million
dollars to live. Yeah. Then yourchecking account. Yeah. But
that's a whole different ball ofwax that is not FDIC insured.
Right. So, yeah, I mean, I thinkit's, you know, again, we've
(16:44):
kind of been making a little bitof a poking a little bit fun at
this, but I think it's a goodway to look at some of this
stuff and understand even on ourlevel, who, for those of us not
getting million dollar checks,why some of these things happen.
Jeff Matevish (16:55):
Yeah, like, you know, if if I won the lottery
tomorrow, and I won $5 million,what would I do? Yeah, I mean,
you know, what's the process ofdoing this legally, you know,
putting your money, yourwinnings into your bank? And
right, you know, what the stepsare.
Drew Thomas (17:10):
I'm very happy that you didn't immediately say,
after I tendered my resignation,what are the very first things
that I do?
Jeff Matevish (17:17):
I'm one of those guys that says, you know, if I
want a million dollars, youknow, I'd still work, you know.
Drew Thomas (17:22):
You know what, I mean, sadly, today, a million
dollars is not what it once was.
No, no. That's not to say thatI'll ever have a million
dollars. But comparativelyspeaking, a million dollars does
not necessarily buy you out ofhaving to ever work again. I
mean, I mean, think about itthis way, and again, every area
is different, every part of thecountry is different. So, but on
average in the United States, anaverage house is like a half a
(17:43):
million dollars now. Yeah. Likethe average home price, the
median home price, I'm sorry,I'm sorry, the median home price
across the United States is like$400,000. So, a million dollars
does not buy you everything itused to, even cars. I mean it's
crazy what cars cost, my gosh,yeah. I mean...
Jeff Matevish (18:02):
I'd love to get a new car, but I couldn't afford
the payments on it.
Drew Thomas (18:06):
No, I mean, and some of these cars, I mean, and
you don't even have to buy aMaserati or an Escalade or
something like that, for some ofthese cars to be more than what
my parents paid for their houseback in the 80s. I mean, it's
just, you know, and evenaccounting for inflation, it's
not, it's not as far differentas you might think. Yeah. So,
yeah, so all right. Well, Ithink this was good. What else
(18:28):
do you got anything?
Jeff Matevish (18:29):
Let me check my notes. Nope.
Drew Thomas (18:33):
Right. Off we go then. Thanks, Jeff.
Jeff Matevish (18:37):
All right, thanks, Drew.
Drew Thomas (18:46):
This podcast focuses on having valuable
conversations on various topicsrelated to banking and financial
health. The podcast is groundedin having open conversations
with professionals and expertswith the goal of helping to take
some of the mystery out offinancial and related topics, as
learning about financialproducts and services can help
you make more informed financialdecisions. Please keep in mind
(19:06):
that the information containedwithin this podcast and any
resources available for downloadfrom our website or other
resources relating to BankChats, is not intended and
should not be understood orinterpreted to be financial
advice. The host, guests, andproduction staff of Bank Chats
expressly recommend that youseek advice from a trusted
financial professional beforemaking financial decisions. The
(19:28):
host of Bank Chats is not anattorney, accountant, or
financial advisor, and theprogram is simply intended as
one source of information. Thepodcast is not a substitute for
a financial professional who'saware of the facts and
circumstances of your individualsituation.
(19:53):
Thank you for listening. Pleasecheck out our full library of
episodes which can be found onthe ameriserv.com website. You
can also download or streamingthe podcast from the favorite
podcast app.
All right, so we are back. Back, still here, I
don't know. It depends on howyou look at it, with another
episode of Bank Chats, 2 Cents,with Jeff Matevish.
Jeff Matevish (00:21):
Hey Drew.
Drew Thomas (00:22):
And myself, of course, and just the two of us
today. As is typical with BankChats 2 Cents, right? Yep. Yep.
So, you found an article, I'mgoing to let you explain the
article. Okay. And then we'regoing to talk about the article.
I'm going to make some jokes,just say, because this article
is a little bit ridiculous onthe surface level, but I think
there's stuff in there that isworth going through. Sure. Yeah.
(00:45):
So, so tell us about thearticle, and then we'll, and
then we'll kind of go fromthere.
Jeff Matevish (00:48):
Okay, so, I was just perusing the internet for
financial news, and...
Drew Thomas (00:53):
As you do.
Jeff Matevish (00:53):
As you do, yeah.
And so there was an episode, aYouTube episode of Hot Ones that
came out. Oh, yeah. Yeah, they,they, it's kind of like this,
but with, with chicken wings andcelebrities.
Drew Thomas (01:06):
So, better.
Jeff Matevish (01:07):
A little bit.
It's better a little bit. Butthey had Serena Williams on, and
one of the the topics they hadtalked about, or that they had
briefly mentioned was that atone point, she had a million
dollar check that she had, had,had won from one of her matches,
and she tried to deposit itthrough the drive thru of her
bank. Gotcha. And they had toldher, you'd better come in for
(01:30):
this one. So, she learned avaluable lesson, I guess this
was years ago. But um, yeah, ifyou have a large check, it's not
as easy as, you know, going upto your depository ATM and
popping it in there anddepositing your check. You know,
there's a little bit moreinvolved.
Drew Thomas (01:46):
Yeah, yeah. So, what? So, did they take her
check? How does the story end?
Like does she take...
Drew and Jeff (01:50):
I mean, that, that's where the story ends. Oh,
that's what I mean. Yeah, thatwas it. So, it had to do with
banking. Yeah.
Drew Thomas (01:57):
Yeah. So, I when you told me this, my first
reaction was, how awful forSerena Williams that she's
driving around with a milliondollar check in her car and just
forgotten it existed.
Jeff Matevish (02:07):
Yeah, that's a great problem to have.
Drew Thomas (02:09):
I mean, seriously.
Yeah. But then, and then on awhim, we're like, oh, well,
since I'm driving by, I'll justgo ahead and pop through the
drive thru and deposit mymillion dollar check, like it's
nothing, like it's no big deal.
I wish I had these problems.
Yes. Like this. Yeah, this is,you know, I mean, don't get me
wrong, the woman is a fantasticplayer and a fantastic athlete,
and she deserves everything thatshe has. But the, I would, I
(02:30):
would love to be so well offthat I could forget that I had a
million dollar check, that Ihadn't yet deposited. So, okay
so, so all things, you know, I'mdone, I'm done ragging on Serena
Williams now, because I amnobody, she can crush me like a
bug. But it does bring up somegood points in terms of, for
(02:50):
those of us that will never havea million dollar check, right,
it still applies. There are somethings that we can talk about
and dissect this a little bitand talk about why banks do what
they do when it comes to checksand deposits and things like
that. So, I guess the questionis, first of all, I guess based
on the story, the question is,why wouldn't they take the check
through the drive thru?
Jeff Matevish (03:12):
So, normally, you know, if it's a transaction
that's outside of your norm, youknow, they may question it. But
who knows, that could be, youknow, a legitimate transaction
for her, you know.
Drew Thomas (03:22):
Could be. Yeah, it could be pretty typical for her
theoretically, right. But you'reright, the first thing that most
banks are going to want to do isknow their customer. So, if you
know that, hey, this person,whoever it is, is typically
depositing large value checks,and they have an account with
you that they've had in longstanding and it's in good shape,
(03:43):
and it has a relatively equalamount of money in there. This
might not have been a big deal,right? Right. But it's still a
million dollars. I mean, this isa big check. And so the bank has
to protect themselves as well,because in reality, you don't
know. I mean, you assume thatsomebody like Serena Williams is
not trying to conduct fraud, butyou don't you don't know where
(04:04):
she got that check. You know,you may know her but you don't
know where she got the check.
She might have played a charityevent and they wrote her a
novelty check for all you know,right? I mean, it has nothing to
do with her, right. So, the bankhas to be protective of not only
themselves, but also thecustomer, right. Because
ultimately the customer isresponsible, they made the
deposit, they're responsible forthat. If that check bounces, the
bank has to try to recover thatmoney somehow, and the first
(04:27):
thing they're going to do is tryto recover it from the customer
that gave them the bum check.
Yeah. So, these laws, orregulations I should say, they
exist not only to protect thebank but also to protect the
customer. Right? So, probablyone of the first thing that they
did when they asked her to comeinside was they probably looked
at that and they probably lookedat her accounts and did all
their due diligence to make surethat everything seemed on the up
(04:48):
and up. That would be my, thatwould be my guest, I mean I'm,
we're making assumptions herebased on a very small story on a
very much better podcast.
Anyway, so, but my guess is thenafter that they probably put a
hold on the check. So, so haveyou ever had a hold put on a
check?
Jeff Matevish (05:07):
I don't think I've ever tried to deposit a
check large enough that wouldrequire a hold.
Drew Thomas (05:12):
Fair enough.
Jeff Matevish (05:12):
I know what, I have an idea what they are.
Okay, they're gonna hold thecheck to make sure that those
funds are available.
Drew Thomas (05:17):
Yeah, I mean, like, honestly, before I got into
banking, I had no idea that theywould ever hold checks. I just
assumed that when you took acheck to the bank, they just
deposited it into your accountand you went on your way. Yeah.
But there are people that forwhatever reason, whether it's,
um, they get an inheritance, orthey get an insurance payout.
Maybe it's that they got a, Idon't know, some sort of a
windfall, whatever it is, theywon the lottery, they got a big
(05:40):
bonus at work for whatever itis, if somebody brings a check
into the bank and says, well Iwant to deposit this, and it's
outside the norm of their normaldeposit behavior, chances are
the bank's gonna say, well, weneed to put a deposit hold on
this, right. And that can makepeople irritated sometimes,
because it makes you feelsometimes like you're doing
something wrong. Yeah. Yeah, Isee that. Yeah. And I don't
(06:00):
think that that's true. Like, inmost cases, people aren't doing
anything wrong. They're justlegitimately trying to deposit
something that they feel istrue. But in some cases, you
know, that check, you know, thebank wants to make sure that the
funds are actually available,the check doesn't bounce. So,
they can put a hold on it. Nownormally, according to
Regulation CC, okay, most banks,what they'll do is they have to
(06:21):
provide you with $200 of thatdeposit the next business day.
And then traditionally, theremaining amount of the deposit,
whatever it is, by the secondbusiness day.
Jeff Matevish (06:33):
Okay, well, why $200?
Drew Thomas (06:34):
I mean, I don't know, okay, that the regulation
says $200 bucks, I'm, you know,that that's what it is. Probably
because the regulation waswritten at a time when $200 was
a lot more money.
Jeff Matevish (06:44):
Okay, okay, that makes sense.
Drew Thomas (06:45):
Yeah, that's my guess. Okay. But that's the,
that's what the rule says. So,the regulation says $200 the
next business day, the rest ofit the second business day,
okay. Unless there areextenuating circumstances. So, I
went back, and I tried to getsome, some information for you
on what those extenuatingcircumstances might be, like,
why would a bank put a longerhold on a check? So,
(07:06):
traditionally, most banks,they're not gonna be able to do
more than about seven businessdays, which is essentially a
week. And have we ever talkedabout business days?
Jeff Matevish (07:14):
No, no we haven't.
Drew Thomas (07:16):
Explained this.
Jeff Matevish (07:17):
My understanding.
So, a bank can deposit money upto a certain time of the day.
Anything after that time,whether it's during the business
hours is considered to be on thenext business day, correct?
Drew Thomas (07:31):
Yeah. Now, a lot of banks are now going to same day.
Okay. Right. So, that so I mean,rules have changed a little bit
based on like, whenever I firstgotten into banking [inaudible]
years ago. Yeah. Butessentially, yes, so a business
day is going to be a day whenthe bank is normally open for
business. Right. So, that'sgoing to be a Monday through
Friday, traditionally. If it's aholiday, like a Memorial Day, or
(07:53):
Labor Day that falls on aMonday, that is not a business
day. Saturdays, even though somebranches are open on Saturdays
for most banks, that is notconsidered a business day.
Right? So, a business day is aMonday through Friday, normal
working hours, that sort ofthing. So, what people don't
always get is that the nextbusiness day for a deposit might
be if I deposit something, saythrough mobile banking, at 10
(08:16):
o'clock at night, on a Friday,well, most banks are already
closed for the day. So, they'reon Mondays business, which means
the your deposit may not show upuntil Tuesday. So, even though
you're depositing at 10pm,Friday, your money may not show
up in your account until Tuesdaymorning. And yet that's still
(08:36):
considered one business day,right. And then you see, when
you start adding holidays andthings like that into the mix,
sometimes it can be four or fivedays before, even though the
bank considers that one businessday it can be it might be
multiple days, if it goes over aweekend or something like that
it can be calendar days, havesignificantly more than than
(08:56):
business days. So, anyway, I'mjust amazing everybody with my
limited knowledge of banking.
So, back to the holds. So, youcould theoretically put a hold
on the check for up to aboutseven business days. Right. And
normally, those reasons aregoing to be for things like, you
could be a new customer, right?
That could be the first thing.
If we don't know you, because Isaid even with Serena Williams,
(09:17):
like, you know, if they knewher, they knew that she was an
existing customer, longtimecustomer of the bank, they know
her history, they know herrelationship, that goes a long
way toward making the decisionon whether or not you have to
hold a check, right. But ifyou're brand new to the bank,
and you don't, and the bankdoesn't know you, has no idea
what your history is, then theymay place a hold on the check
because they simply don't knowyou. They don't have any history
(09:38):
to go off of, right. Another onewould be a large deposit. So,
checks worth more than, say$5,000, those in excess of the
current value of your account,are more likely to be held.
Jeff Matevish (09:52):
So, so if you can't, if you can't back it if,
if that check bounces or yeah,they'll put a hold on it.
Drew Thomas (09:57):
Yeah, yeah, I mean, really, I mean, so, you know, in
the case of Serena Williams,chances are she had more than a
million dollars in her account,it would be my guess. Yeah.
Unless her accountant is justabsolutely awful. But she might
have accounts in multiple banksas well.
Jeff Matevish (10:11):
Yeah, you know, because that's not necessarily
insured by the FDIC.
Drew Thomas (10:15):
Oh, yeah, we can talk about that. Yeah, that's
good, very excellent point,Jeff. Frequent overdrafts. So,
if an account has a repeatedhistory of overdrafts, banks may
be more likely to place a holdon the check to make sure they
clear before releasing thefunds. I mean, I hate to say it,
but there are people that runreally close to the bone when it
comes to their accounts. And ifthey are traditionally,
(10:36):
habitually over drawing theiraccount, the bank is less likely
to just grant you that depositin the hopes that they get the
money in time for your accountto be considered good, that
you're in good standing. Andthen also checks previously
returned unpaid. So, if you'retrying to deposit a check that
was returned unpaid once ormultiple times before, there's a
(10:59):
stronger chance your bank willwant to validate the check
before making the fundsavailable. It can also even
depend on who the check is beingdrawn on. If it's being drawn on
the same bank as yours, the bankmight be able to look at that
other account and make sure thefunds are actually available.
You know, because they're thesame customer, they're going to
tell you that. Right. Right. Imean, they look into it, they
(11:19):
could look at it and see, okay,well, are there funds available
in this, in this account or not?
Sure. Even that's a little iffy,though. Because if somebody has
written 12 checks in the sameamount, and the account might
look like there's fundsavailable, but maybe they really
aren't, because there's 12checks out there, depends on
which order they come in. Yeah.
But again, if the, you know, ifthe check is from a bank halfway
across the country, they may nothave any clue as to whether or
(11:41):
not that check is good. Okay.
There's also things to consider,like, Is it a, is it a personal
check? Or is it coming from aninsurance company? Is it a, is
it a treasurer's check, orcashier's check that is
basically, guaranteed funds? Doyou know why that's called
guarantee funds? No. So,treasurer's check, or cashier's
check is considered guaranteedfunds, I'm air quoting. For
(12:02):
those of you who can't see thefact that I'm air quoting.
Jeff Matevish (12:05):
Oh, because that's written by the bank.
That's, that's a guaranteedcheck.
Drew Thomas (12:09):
Right from the bank, because it has to be paid
for with cash, okay. So, youcan't write a check for a
cashier's check, you can't use acredit card for a cashier's
check. It has to be fundsavailable in your account,
essentially cash, that you thenget the check from the bank for,
so. So, that kind of a checkmight be a little more prone to
not getting a hold as opposed tosomething else. But even those
(12:30):
can still be held. I mean, thebank, it's the bank's
prerogative, essentially, tolook at all these different
things and make sure it's notfraud. You know, we talked about
money laundering and things likethat, you know, there are people
that will pass a check fromperson to person to person in an
effort to try to make that moneylook good. Or look legitimate,
even though it isn't. So, yougot to be aware of that stuff.
Jeff Matevish (12:51):
So, now, we've been kind of talking about,
we're assuming we're talkingabout kind of personal checking
accounts. Is there anydifference between business to
business or?
Drew and Jeff (13:00):
Not real I really, they can put a hold on?
Sure. Okay. Yeah.
Drew Thomas (13:03):
Yeah, they absolutely can. Again, maybe not
at that value, becausebusinesses oftentimes deal with
much larger dollar values, butit's possible. Sure they could
there they wanted to. So, yeah,so it's understanding the, it's
understanding the regulation andlike, your, your bank cannot
just unilaterally say, well, youknow, we're gonna hold this
check for a month. Like that'swhy Reg[ulation] CC is in place.
(13:25):
It says, it gives you aguideline to say how long a bank
can realistically hold a depositbefore they give you access to
that money. And that was put inplace because there was a time
way, way back. And you know,what we should do? We should do,
I'm digressing again. We shoulddo a 2 Cents or a podcast about
like some of the history ofbanking, because some of the
(13:47):
stuff, these regulations cameabout because of things that
happen. Yeah. And we could, wecan maybe talk about that at
some point too. That might be aninteresting topic. But anyway,
there was a time whenever thebanks could really hold your
check for as long as they wantedto. And that presented all kinds
of problems, you know, forpeople, where they were getting
paychecks, but they weren'tgetting, their checks for
(14:08):
bouncing, bills weren't gettingpaid because the bank was just
lollygagging around not doingtheir job, not depositing the
checks and things.
Jeff Matevish (14:15):
So, it probably played into the you know, people
were not trusting the banks backthen. And like we talked about,
you know, they're not, peoplearen't putting their money in
the banks. Yeah.
Drew Thomas (14:23):
Yeah. Like back in the 20s. And 30s. Yeah, during
the Great Depression and stuff.
Sure. I mean, so yeah, so that'swhy some of these regs exist.
And so it's fine. It's walkingthat fine line between
protecting the bank protectingthe customer, but also doing
right by the customer who's, youknow, 99 out of 100 people are
just trying to go aboutlegitimate business. And you
have to recognize that but thatdoesn't mean that you ignore the
(14:45):
fact that there could be the 1out of 100 chance that there's
fraud or something elsehappening. You got to be aware
of that. You know so, especiallyin today's world, my gosh, we've
had so many conversations aboutcybersecurity, things like that.
But yeah, so anyway, gettingback, you also brought up a good
point about the FDIC. So, whyis, so why else would this be an
issue with this million dollarcheck with Serena?
Jeff Matevish (15:05):
So, you know, when she puts his money in her
bank, a million dollars is notfully insured by the FDIC, only
$250,000 are insured for her,for her, right, right, per
financial institution. So, shemay be better off separating
that into several differentfinancial institutions.
Drew Thomas (15:24):
Or, or there's, there's also different ownership
categories she can look into.
Right. So, if she wanted to opena joint account with me say,
right, okay. Okay. Well, andthen put that money in there,
well, now we are jointly insuredfor $500,000, still only half. I
get $250,000, she gets,$250,000, right. So, there's
there's that option as well.
(15:45):
She's not going to open one withme. Maybe she'd open one with
you? I don't think so. We'd bothhave some explaining to do at
home if we opened an accountwith Serena Williams.
Jeff Matevish (15:54):
Not too much explaining. I think they'd get
over it for half a milliondollars. But yeah.
Drew Thomas (15:58):
Probably, yeah. So, that, so that is an option, too.
But yeah, I mean, you want toalso diversify. And there are
honestly, probably bettervehicles to have a million
dollars in other than a checkingaccount to be perfectly fair.
Whether it's a CD, or some sortof traditional savings vehicle
like that. But also, you know,that gets into talking about,
(16:21):
you know, trust and personaltrust and investments and things
like that, too, that havenothing to do with FDIC
insurance. But in reality isprobably, if you have a trusted
financial adviser, probably abetter place for your million
dollars to live. Yeah. Then yourchecking account. Yeah. But
that's a whole different ball ofwax that is not FDIC insured.
Right. So, yeah, I mean, I thinkit's, you know, again, we've
(16:44):
kind of been making a little bitof a poking a little bit fun at
this, but I think it's a goodway to look at some of this
stuff and understand even on ourlevel, who, for those of us not
getting million dollar checks,why some of these things happen.
Jeff Matevish (16:55):
Yeah, like, you know, if if I won the lottery
tomorrow, and I won $5 million,what would I do? Yeah, I mean,
you know, what's the process ofdoing this legally, you know,
putting your money, yourwinnings into your bank? And
right, you know, what the stepsare.
Drew Thomas (17:10):
I'm very happy that you didn't immediately say,
after I tendered my resignation,what are the very first things
that I do?
Jeff Matevish (17:17):
I'm one of those guys that says, you know, if I
want a million dollars, youknow, I'd still work, you know.
Drew Thomas (17:22):
You know what, I mean, sadly, today, a million
dollars is not what it once was.
No, no. That's not to say thatI'll ever have a million
dollars. But comparativelyspeaking, a million dollars does
not necessarily buy you out ofhaving to ever work again. I
mean, I mean, think about itthis way, and again, every area
is different, every part of thecountry is different. So, but on
average in the United States, anaverage house is like a half a
(17:43):
million dollars now. Yeah. Likethe average home price, the
median home price, I'm sorry,I'm sorry, the median home price
across the United States is like$400,000. So, a million dollars
does not buy you everything itused to, even cars. I mean it's
crazy what cars cost, my gosh,yeah. I mean...
Jeff Matevish (18:02):
I'd love to get a new car, but I couldn't afford
the payments on it.
Drew Thomas (18:06):
No, I mean, and some of these cars, I mean, and
you don't even have to buy aMaserati or an Escalade or
something like that, for some ofthese cars to be more than what
my parents paid for their houseback in the 80s. I mean, it's
just, you know, and evenaccounting for inflation, it's
not, it's not as far differentas you might think. Yeah. So,
yeah, so all right. Well, Ithink this was good. What else
(18:28):
do you got anything?
Jeff Matevish (18:29):
Let me check my notes. Nope.
Drew Thomas (18:33):
Right. Off we go then. Thanks, Jeff.
Jeff Matevish (18:37):
All right, thanks, Drew.
Drew Thomas (18:46):
This podcast focuses on having valuable
conversations on various topicsrelated to banking and financial
health. The podcast is groundedin having open conversations
with professionals and expertswith the goal of helping to take
some of the mystery out offinancial and related topics, as
learning about financialproducts and services can help
you make more informed financialdecisions. Please keep in mind
(19:06):
that the information containedwithin this podcast and any
resources available for downloadfrom our website or other
resources relating to BankChats, is not intended and
should not be understood orinterpreted to be financial
advice. The host, guests, andproduction staff of Bank Chats
expressly recommend that youseek advice from a trusted
financial professional beforemaking financial decisions. The
(19:28):
host of Bank Chats is not anattorney, accountant, or
financial advisor, and theprogram is simply intended as
one source of information. Thepodcast is not a substitute for
a financial professional who'saware of the facts and
circumstances of your individualsituation.
(19:53):
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