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If you want to help banks profit, avoid paper cheques (fedia.io)
submitted 4 weeks ago by to c/cash@slrpnk.net
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When you send or receive mony electronically, the money is in limbo for a period of time. The money leaves the payer’s account and sits in the bank’s own account where the bank earns interest. After some time, the money eventually finally moves into the recipient’s account. That limbo time is quite profitable for the bank. Banks maximise that limbo time to the full legal extent.

So when you send or receive money electronically, you show your love for the bank and the bank loves your patronage. Don’t like banks? Stop being lazy and go back to paper cheques. And of course it’s better to cash them rather than deposit them.

Paper cheques keep the money in the posession of the payer up until the cheque is presented. At that moment, cash is paid to the recipient. There is no profitable limbo time in this case.

This came up in this comment but thought it should have a separate thread. We are losing our right to autonomy (paper cheques) because addiction to every slight bit of convenience is taking a toll.

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[–] 10 points 4 weeks ago (6 children)

My experience is the opposite in the US.

When I receive money via Zelle, it shows up within seconds.

When I deposit a check, the bank places a hold for days to ensure the funds actually exist.

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  • [–] [S] 1 point 4 weeks ago* (last edited 4 weeks ago) (5 children)

    When I deposit a check, the bank places a hold for days to ensure the funds actually exist.

    Indeed checks should be cashed. When a check is cashed, the institution that supplied the cash is actually at a loss because the cash is given as an advance until the check clears.

    (edit) Is Zelle how you receive paychecks?

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  • [–] 2 points 4 weeks ago (3 children)

    That's why banks will only cash a cheque if you have money to cover it in your account. If you're broke they'll hold the cheque until they get paid from the other bank. I've never had an etransfer take longer than 5 minutes to complete.

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  • [–] [S] 1 point 4 weeks ago* (last edited 4 weeks ago) (1 child)

    You can go to the issuing bank and cash a check without a dime to your name and no account whatsoever. If you go to another bank, a check cashing business, or even a casino¹, the equation changes. Different regions are different. In Belgium, you can cash a cheque at the post office banque without having an account or a dime to your name, and also pay nothing² for the service.

    ¹ Some casinos will not only cash your check for free but also give you rewards for cashing a check in their casino, knowing that you will most likely give them some gambling action.

    ² The fee in Belgium used to be €4 but that was recently eliminated.

    (edit)

    I've never had an etransfer take longer than 5 minutes to complete.

    You’ve never done an ACH wire transfer? Those can take 3 days, and this his how most electronic paychecks are paid in the US -- or so I thought. Has that changed? Are people using Zelle for paychecks now?

    That's why banks will only cash a cheque if you have money to cover it in your account.

    That sounds more like a security mechanism. How does that compensate the interest deficeit during the uncleared time? If you have money in your account, the bank is already getting interest on that to some extent. I don’t see how cashing a check could increase that.

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