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#2262680 - 11/18/21 08:35 PM No Longer Able To Send Check for CD Interest?
Anonymous
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A bank I do business with just informed me that they are no longer able to send me a check for CD interest, that it must be deposited to an account at that bank or another bank of my choice. I want a check. Is there a new rule or reg that says checks can't be sent or is this bank just saying that?

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#2262681 - 11/18/21 08:40 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,074
Illinois
The Bank made a business decision to no longer send interest checks. Given the rising cost of postage and how low interest rates are, the bank probably determined that it is not cost effective offer this option.

Your choice is to either accept the new terms or close your certificate when it matures and find a new bank.
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#2262682 - 11/18/21 09:21 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
Anonymous
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The crazy thing is, they are still going to send a notice of the amount of interest, so it's not related to postage. I did tell them this CD will be closed at maturity. Their Loss.

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#2262688 - 11/18/21 10:20 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
Anonymous
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Do you have a checking account at that bank? An ACTIVE checking account that you use on a regular basis? Or are you just a rate shopper that only has a CD there because of a higher rate? I'm guessing the latter. So really, no big loss.

By the way, the notice is regulatory, so postage is irrelevant.

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#2262706 - 11/19/21 03:35 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
Anonymous
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If you consider over $150K on deposit irrelevant, I guess you're not my kind of bank anyway.

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#2262717 - 11/19/21 04:27 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
Rocky P Offline
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Joined: Jun 2003
Posts: 7,258
Florida
You would appear to have some leverage with a deposit that size. Inform branch management that they'll be losing the deposit unless they come up with an alternative. See Brian's advice above.
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#2262721 - 11/19/21 04:51 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
TMatt87 Offline
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TMatt87
Joined: May 2011
Posts: 1,910
Idaho
We made a similar decision, because we were sending out a bunch of checks in the $1.00 range. However, if someone was upset or had a large deposit, we could make exceptions on a case by case basis. No reason to lose a customer over a stamp and envelope.
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#2262724 - 11/19/21 05:06 PM Re: No Longer Able To Send Check for CD Interest? Rocky P
Anonymous
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This is the way I think. Rocky, where is your bank located and do you accept bank by mail accounts?

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#2262729 - 11/19/21 05:27 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
Third Trip Offline
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Joined: Jul 2016
Posts: 22
The environment is very odd at this point in time. There's a lot of money in the system right now. As Brian stated above, cost of postage and low rates probably impacted this decision, but they may have also decided that the cost and resources to create and handle checks are better allocated to other operational issues, especially if they are having staffing challenges. The bank may have accepted the risk that this change may result in some deposit loss.

You never really indicated if you have a single (albeit significant) account with this bank, or a relationship (long-standing account holder; multiple accounts, including checking accounts; business and personal accounts; loan and deposit accounts, etc.). If you have a relationship, the bank may be much more likely to listen to and address your concerns. A bank is typically anxious to hold on to relationships because there was a lot of time and effort put into building those, but may be somewhat less concerned that they may lose some accounts, especially if it's one account that is easy to move.

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#2262743 - 11/19/21 07:29 PM Re: No Longer Able To Send Check for CD Interest? Anonymous
HappyGilmore Offline
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Originally Posted by Anonymous
If you consider over $150K on deposit irrelevant, I guess you're not my kind of bank anyway.

in today's poor interest rate environment and every bank being flush with cash, an account of $150k may be considered irrelevant to many banks, while to the account holder it would be anything but insignificant. I'm hearing of more banks going the route of depositing interest payments into a DDA or SAV account rather then send checks out, solely due to cost of the manual process of doing so. and if the interest check is small, they frequently aren't cashed and then have to be escheated down the road - all this monitoring costs money.

Many internet banks still pay a higher rate of interest than traditional brick and mortar banks, if you haven't already done so you should investigate that. Bankrate.com tracks and shows highest CD rates available, i don't see any listed over 1%, so many banks aren't really bending over backwards to service CD customers, especially if the CD is the only account in the relationship.

and please understand i'm speaking in general terms, there are many banks that state one thing and make exceptions to accommodate customers, happens almost daily.
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