[moneydance] Observe Payment Date Restrictions ignored in MD 528

[Jon D. Slater]

It actually depends on whether the paper checks being mailed have your
account and routing information on them, or if your bank transfers the money
into some Mega-pool of money and writes checks from it.  Transferring the
money into their pool will immediately deduct it from your account.  Then it
may take, up to 7 days before the check clears the banks account.

The advantage for the bank using the pool-o-money approach is they can earn
money on the pool until their check (on your behalf) actually clears.

This is how many banks are able to offer free on-line banking.  A large
financial institution can more than recoup their costs (in software,
postage, labor, and processing fees) this way.

Say you and 5000 fellow bank customers all send a $2000 mortgage payment,
which the bank pays from their mega-pool.  If it takes 7 days for the check
to actually clear, they have $10,000,000 of their customers money to 'play
with' until the checks actually clear.

Add to that all of the electric/water/phone/etc bills they process in a
month.

Just a possibility.

Jon
(A former bank employee)



> -----Original Message-----
> From: moneydance-info-bounces at moneydance.com [mailto:moneydance-info-
> bounces at moneydance.com] On Behalf Of Joe Menola
> Sent: Friday, June 23, 2006 5:19 PM
> To: General discussion related to Moneydance
> Subject: Re: [moneydance] Observe Payment Date Restrictions ignored in MD
> 528
> 
> On Friday 23 June 2006 10:13 am, Kevin O. Lepard wrote:
> > >[I] am a bit frustrated that BofA seems to take the money out of my
> > >account on the payment date instead of whenever the payment is
> > >actually sent or the check cashed.  I don't know of most banks do
> > >this, but I wouldn't be surprised.
> >
> > All the banks I've used to make payments this way do this.  I don't
> > much care for it either, but I try to look at their making money on
> > the float as a trade-off for the service being free (at least at my
> > bank).
> 
> For eft payments, the day it is sent is day it is received (the transfer
> actually happens in a matter of seconds), so deduction at that time is
> appropriate.
> As for sending paper checks on your behave...the issue of the check, is
> much
> the same as the receipt of one you've written, when a check you've written
> is
> presented to the bank, they don't wait until the other person has those
> funds
> available to deduct it, it gets deducted when the receive it do they?
> Once they send that check it must be deducted from their assets and
> therefore
> from yours to balance the books.
> Funny, I noticed no complaints about not having to pay the postage to send
> that check...;)
> 
> -jm
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