What we believe to be a "scam" just happened here at our bank. Thank goodness we came out Ok. Has this happened to anyone else????
A short term CD (7 days) was purchased with a check issued on an out-of-state bank.
Check was returned NSF on the same day the CD matured. (thank goodness the money had not gotten away as yet) Also, further information reveals that the check is written off a new account at that out-of-state bank. (Something doesn't smell right here!)

Normally we don't put any kind of a hold on Certificate of Deposit funds. Am I correct in thinking this problem could be avoided if we put a policy in place to not open short term CDs on uncollected funds or to automatically place holds on new short term CDs opened?

Thanks for the heads up. I am passing this along to our security officer. I get so much helpful information from this site!

We no longer issue CDs with maturities less than 90 days - but that may be dictated by competitive pressures. Neither placing holds short-term CDs, as long as the hold did not exceed the original term, or requiring collected funds (although be careful on that because even though funds are "collected" in two days it does not insure the funds are good) would present any compliance issues.

Is this the case with many of you---your bank no longer issues CDs with the shorter terms?

We offer a 30 day CD. Any customer who does not maintain a transaction account with us, their CD will have a 30 hold placed on it.