Everybody has a relationship with a bank, but few people take time to understand how their bank works. Here are four things you should know about banking in the USA.
Know the cut-off time for each location – Each banking location, including ATMs where you can deposit money, have cut-off times after which your deposits will take effect the next day.
For example: the local branch has a cut-off time of 4pm. Your rent payment of $800 is going to be taken out tonight. You only have $700 in your account. You just received your check from work and you want to deposit it so your account will not be overdrawn. If you make the deposit before the 4pm cut-off, it will be posted today and you will not be overdrawn, but if you make the deposit five minutes after 4pm, the deposit will be posted on the next business day. Knowing your bank’s cut-off time will help prevent you from being overdrawn on your account and will help you avoid other unpleasant situations.
Most banks pay the largest items first – If you have five transactions being processed at night, the bank will most likely cover them from the largest to the smallest. This seems very unfair when the $3 coffee costs an extra $35 in overdraft fees. The reasoning that banks give for this is that larger items being paid are probably more important, such as the rent or car payment. There is usually no way to reverse or change this order.
Bank fees are one of the biggest sources of income for banks – According to USA Today, banks collected $37.8 billion in fees in 2004, ($126 for every one of the 300 million people in the USA). Fees can vary with the type of account that you have at the bank.
For example: it may be possible to change your account to a lower-fee account simply by keeping a minimum balance at the bank. Be sure to talk with your banker about differences in fees for different account types.
Bank managers – In most banks, the top manager from the branch where you opened up your account has the most options in reversing fees or being flexible with regard to any aspects of your relationship with the bank. Tellers and customer service managers don’t have as much discretion as the branch bank manager.