Bank return policy...

Banks have pretty clear policies on how long they can hold deposits for - I think what happened with you was because of the holidays things were delayed a couple days.

Really, to be 100% safe, you should never write a check when you don't have the money in the account. Nowdays most places use Check 21, which allows them to pretty much immediatly debit your account when you present a check. You can't count of the float time.

Yes Goudah..I can see that but my question was..why does fed laws state they have to return an NSF check immediately yet hold my deposite for up to 3 days before crediting my account. Is this true???

I am not certain as to your specific situation, but I receive two different checks from the federal government. One is my Air Force retirement check (for the first of each month)and the other is for my federal civil service (every two weeks). If your annuity check is technically dated for the first of each month, the bank can hold the direct deposit until the date the check is actually made out for. In the case of a holiday, such as 1 Jan, the deposit can be held until the first business day after the holiday, in this case, the 2nd of January. In my case, the civil service check is dated for a Friday, my actual payday. Like your bank, my credit union usually credits my account the day before. This paycheck is always dated for the Friday of payday week, but it is in my account, ready to be withdrawn by 11:00 Thursday morning. My retirement check goes into a different bank. Although dated for the first, it sometimes is credited the day before. On other occasions it is not in my account until the first or, in the case of a holiday or a weekend, the next business day. Take a look at the annuity statement or notice you receive and check to see the actual date the check is made out for. Since over a year ago, the banking system uses what is commonly called Check 21. This stemmed from 9-11 when flights were grounded and banks could not send nor receive checks for processing. With this system, businesses that you write checks to can get their money quickly because checks can be processed electronically and does not have to be physically presented. Although not fair, the reverse is not true. Checks deposited into your personal accounts do not necessarily fall under this electronic system. As a result, a check you write to a company can clear in hours rather than days.

Thank-you both for your insight. I know about checks getting to my bank...I understand that about not writing check without the funds in your account. True..unfortunetly for me...I needed food. However...I do know that my bank had my annuity check on Friday Dec. 28th because the person I talked to informed me that it was set to be deposited at midnight. The question I had was what fed law stated that a NSF check has to be returned immediately and yet they can hold my deposite up to three business days before depositing it in my account? It should work both ways...

Here is what I discovered. OPM states (from its web site), "...annuity is payable once each month on the first business day of the month. Please note that Sundays and Federal holidays are not business days." That means that your annuity check was actually dated for 2 January as the first is a federal holiday. The bank can wait until the 2nd of January to credit your account, regardless of when it received the electronic notification of that annuity because, technically, the check is not good until the 2nd. Now, if the bank, knowing that the check is from the federal government and assumes that it is good, can credit your account sooner, which it apparently has in some of the months before. But remember that the end of the year is also a very busy time for banks and other businesses because of the required record keeping, and it may not have had the time to credit the account sooner as it did before. But it was under no obligation to credit the account until the 2nd. Now, regarding return checks. According to Part 229, paragraph 229.31 of the FDIC regulations governing banking operations, the bank returning a check must do so "expeditiously." This means, according to the federal regulation, that the bank used by the company to whom you wrote the check must receive the return check by 4 PM of the second business days after the business day your bank received it for payment and determined that there is insufficient funds to cover it (if both banks are in the same processing region, otherwise it allows four days). This regulation is under the FDIC 6500, Part 229, Availability of Funds and Collection of Checks.

Hope this helps.

Thank-you for your research...I understand what you are saying. I am not trying to be an exception to the rule... however I have been in contact with the office of personnel management...they stated to me that when the bank receives my annuity it is up to their discretion as to when to deposite it (within reason) it is not like Social Security there is not a diffenent day set to be deposited..the money is there sometimes 24-48 hours ahead of time. My bank has chose for the past 12 months to deposite my check on the last day of the month. Now they were open on the 12/31 regular business hours and they had my deposite..if they decided to deposite a check on the 1st day of the month...then they should do so every month...not wait until the end of the year to change. They held my annutiy Friday..Monday and then make the deposite Wednesday morning. Regardless of the holiday...they had plenty of time for that transaction and they decided not to do it. It's just wrong to hold a deposite that long.

Laura, some banks have longer hold times than others, have you considered finding a different bank?

Yes I am looking into other banks that are near my home. It's probably a good idea since I am unhappy with my bank. It has changed alot in the last few years and the service isn't very good. Not as customer friendly as they used to be...but nothing ever stays the same.

Just because they were open on the 31st doesn't mean that was a processing day for them. The 31st was a Monday. Because of the holiday, any transactions done Saturday through Wednesday were all considered Wednesday's date to the bank. Therefore, even if they got the payment electronically on the 31st, to them it was not to be posted to your account until the 2nd. They may have had a lot of changes to their policies and procedures to catch up with the bigger banks and to stay in compliance with the federal governments rules. Maybe check with them and see how their last few audits went. I bet they were cutting corners on things and the Feds came down on them, so they've had to clean up and be really strict about following the rules. Just a thought.