Here we go.

A large, neighboring regional bank in my area holds all deposits not drawn on their bank (excludes cash & "on-us" checks) for one business day.

In other words: This is not a Reg CC hold where a hold notice is issued at the time of deposit, the funds availability reads something like: "Funds may not be available for immediate w/d, funds deposited other than cash and on-us checks will generally be available the business day after the business day the deposit is received if the deposit is made by 2:00."

For example: Mr.Customer deposits a $300.00 check drawn on a local bank before 2:00 on a Monday. Mr. Customer gets credit for the first $100 of the deposit on Monday night at midnight and receives credit for the rest of the deposit on Tuesday at midnight. So all of his deposit is available to him to pay checks/charges on Wednesday.

Has anyone heard of banks doing this? They say it is due to an increase in deposited checks being returned unpaid. I just wonder if it is entirely about fee income from all of the NSF fees that are generated from this.

Do you mean as opposed to giving immediately availability on everything whether required or not under Reg CC?

I have seen banks do that. I have also seen banks give immediate availability to all business accounts unless a large deposit threshold is reached.

Sometimes banks will stretch things out a day or so, within the reg, to improve their earnings on the "float".

Some banks will do this to see if customers complain. No complaints, no service issue. Bank can earn $ on the float.

That's exactly it....making money on the float holds. It is a nightmare trying to explain this process to customers, most folks think that when they make a deposit it will all pay checks that night (unless given a hold notice)

Thanks for the input!

Just as general education, SB, it generally is not necessary to post the same question in more than one forum here. It makes it more difficult for you to get a consistent answer, makes the whole chain of discussion harder to follow, and causes others to spend time reading the same stuff twice. I think the other thread actually better answers your question than this one.

Thanks but different folks view different forums and I wanted a diverse answer. Have a good day and thanks again for the input!

From the posting guidelines at the top of the page:

Don't post the same question in multiple places unless it isn't answered within a reasonable time.

Rephrasing Magic's request that you not post the same question in multiple forums: The practice wastes other people's time; i.e. it's impolite. If it becomes a pattern, one or both will be deleted.