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115 Bank Accounts and Services Questions and Answers

The bank/credit union is charging high service, activity, maintenance, or other fees on my checking account. Can the bank/credit union do this?

Yes, but your bank or credit union must disclose any fees associated with a deposit account (like a checking account) when you open the account.

A bank or credit union cannot charge you more than the amount of the fee that has been disclosed to you, but it may give you notice after you have opened the account that the fees are changing. Federal law generally does not otherwise limit the amount of checking account fees. You may want to talk to your bank or credit union to see if there is a different account that is suited to your needs and costs less to maintain.

The bank/credit union closed my checking account even though I did not want them to. Can the bank/credit union do that?

Yes, a bank or credit union can close your account without your permission. A bank or credit union is most likely to do this if you have written bad checks or don’t have enough in your account to cover your fees. Banks and credit unions may also close dormant accounts for which there has been no activity for a substantial period of time (generally years). Some states may require your bank or credit union to give you notice before it closes your account.

The bank or credit union raised the fees on my checking account. Can the bank or credit union do this?

Yes, but your bank or credit union must give you advance written notice 30 days before it increases the fees on your checking account.

The bank/credit union refused to cash a check because it was more than six months old. Is this allowed?

Checks that are more than six months old are called “stale checks.” A bank or credit union may choose to honor such a check and different states have different requirements, but federal law does not require it to do so.

The bank/credit union said I overdrew my account several times in one day and charged me a fee for each overdraft. What should I do?

You can reduce your overdraft fees by monitoring your account balance, opting out of debit card overdraft, and setting up a linked savings or credit account to cover overdrafts.

The CFPB is currently looking closely at overdraft practices and collecting information about them. If you have an experience you would like to share with us, we’d like to hear from you.

The bank/credit union stopped paying interest on my money market account because I wrote too many checks. Can the bank do this?

Maybe. You can only make six total transactions per calendar month or statement cycle on money market accounts by check, debit card purchase, and electronic transfer. You can make unlimited withdrawals or transfers by ATM, in person, by mail, messenger, or telephone check (where payment is made using your account number and bank routing number).

Your bank or credit union must prevent withdrawals or transfers exceeding these limits and must contact you if you exceed them. If you continue to exceed these limits after the bank or credit union has contacted you, the bank or credit union must either:

  • Close the account and place the funds in a transactional account such as a checking account that does not pay interest; or
  • Take away the transfer or check writing capabilities of the account.

If you wrote too many checks and your bank or credit union places your money into a checking account, you may no longer earn interest.

The bank/credit union stopped paying interest on my passbook/statement savings account because I made too many withdrawals. Can the bank do this?

Passbook savings and statement savings accounts are limited to no more than six withdrawals or transfers per calendar month or statement cycle. This limit applies to checks, debit card purchases, and electronic transfers but does not include withdrawals or transfers by ATM, in person, by mail, messenger, or telephone check (where payment is made by using your check account number and bank routing number).

Your bank or credit union must prevent withdrawals or transfers exceeding these limits and must contact you if you exceed them. If you continue to exceed these limits after the bank or credit union has contacted you, the bank or credit union must either:

  • Close the account and place the funds in a transactional account such as a checking account that does not pay interest; or
  • Take away the transfer or check writing capabilities of the account.

If you wrote too many checks and your bank or credit union places your money into a checking account, you may no longer earn interest.

Can a bank or credit union cash a post-dated check before the date on the check?

Yes. Banks and credit unions generally don’t have to wait until the date you put on a check to cash it. However, state law may require the bank or credit union to wait to cash the check if you give it reasonable notice. Contact your bank or credit union to learn what its policies are.

Can a bank or credit union refuse to open a checking account for me?

Yes. There are a number of reasons why a bank or credit union may refuse to open a checking account, for example:

A history of writing bad checks. Some people are listed in a database of customers who have been identified as having mishandled checking accounts in the past, which means the bank or credit union is less likely to let them open a checking account.

Failure to provide adequate identification. A bank or credit union may refuse to open a checking account for someone who cannot provide the identification that it requests.

TIP: If you can’t get a checking account because you are listed as having a prior problem with handling a checking account, try another bank or credit union. Policies vary about how a prior problem will interfere with opening a new account.

Can the bank/credit union charge me a fee when it transfers money from my savings account to cover an overdraft from my checking account?

Yes, if the fee was disclosed at the time you opened the account or at the time you authorized linking the savings account with the checking account, the bank or credit union can charge you a fee.

Usually, the costs of paying overdrafts from a linked account are considerably less than overdraft fees. You should compare the fees to other options to see what is best for you.

Can my bank/credit union deduct bounced check fees from my account?

Yes. Your bank or credit union can directly remove funds from your accounts to pay fees assessed on that account.

Can the bank/credit union deduct fees from my account?

Yes. Your bank or credit union can generally directly remove funds from your account to pay fees.

Can the bank/credit union put a new fee on my checking account?

Yes, except that in most cases, your bank or credit union must give you at least 30 days’ notice before adding a new fee or increasing an existing fee. Exceptions include fees related to check printing and the expiration of clearly designated promotional fee waivers. Check your account agreement for more information on fees your bank or credit union can charge.

Can a creditor garnish my Social Security benefits to pay a debt?

If a creditor sues to collect a debt you owe and wins a court judgment against you, the creditor can ask the court for an order to garnish your salary, bank account, or other assets. The court order would instruct your bank to turn over money from your account. However, federal law says that many federal benefit payments like Social Security benefits, Supplemental Security Income (SSI) benefits, Veteran’s (VA) benefits, Railroad Retirement benefits, and benefits from the Office of Personnel Management are not subject to garnishment in most cases - which means that this money is exempt. (For some benefits, there are exceptions for money owed in child support, spousal support, or for federal taxes.)

Under a federal rule that became effective in May 2011, your bank is required automatically to protect up to two months of these benefits that are directly deposited into your account.

In the past, when a creditor asked a bank to garnish an account, the bank would generally freeze the account while the parties sorted out whether the money was exempt.

Now, if the bank receives a garnishment order against an account holder, the bank must review all accounts owned by the person to see whether any of the exempt federal benefits were electronically deposited during the preceding two months. If yes, the bank must calculate the protected amount. That amount equals all benefit amounts direct deposited in the account in the two-month period or the balance in the account, whichever is less. The bank must notify you that this amount is protected.

In some cases, your federal benefits are not automatically protected, including if:

  • You receive your federal benefits by check rather than direct deposit
  • Your federal benefits were deposited more than two months before the bank received the garnishment order
  • You transferred the money from the account that received the federal benefits to another account

If any of these situations apply to you, your money still may be exempt from garnishment, but you will have to tell the court or your creditor that you think money in your bank account is exempt.

Some states provide greater protection than the federal law for benefits payments that are in your bank account. This means that, in some states, the amount your bank will automatically protect from garnishment is higher than under the federal rule.

Another way to protect greater amounts of exempt federal benefits from garnishment is to use the Direct Express card. Direct Express is a prepaid debit card on which federal payments, including Social Security, SSI, and VA benefits, can be deposited. Benefits paid this way cannot be frozen or garnished unless they fit the exceptions under federal law – for example, if you owe child support or alimony.

Can I be charged more than one fee for a single overdraft?

You should check your account documents to see how long you have to repay overdrafts before you are charged additional fees. To find out about overdrafts quickly, your bank or credit union may offer a text or email alert to tell you when your account is overdrawn. You can also monitor your balances online. Ask your bank or credit union how to sign up for these alerts.

The CFPB is currently looking closely at overdraft practices and collecting information about them. If you have an experience you would like to share with us, we’d like to hear from you.

Can I cash a check at any bank or credit union?

Not necessarily. A bank or credit union is usually required to cash a check if:

  • The check is written on an account at that bank or credit union
  • The person or business that wrote you the check has enough money in his/heror its account to cover the check
  • The check is not more than six months old, and
  • You show proper identification

Generally, a bank or credit union is not required to cash a check if the check comes from an account at another bank or credit union.

Your bank or credit union may allow you to cash a check from another bank or credit union, or it might require you to deposit the check into your own account. If you deposit the check in your account, your bank or credit union can make you wait until the check hold time has expired to draw on those funds.

If you go to a bank or credit union where neither you nor the person writing the check has an account, the bank or credit union does not have to cash the check.

Can I close my account whenever I want?

Most of the time, yes, but your bank or credit union may require you to settle your balance before allowing you to close an account that is overdrawn. If you want to close your account, you should call your bank or credit union or go in person and give them your account information.

Once you have made a request, state law generally requires banks or credit unions to close your account in a reasonable amount of time. Be careful when closing accounts to make sure you have no outstanding or pending checks, fees, or automatic payments, because causing these to bounce may result in fees and affect your ability to open another checking account in the future.

Some banks or credit unions may charge a fee if you close your account shortly after opening it. You should check whether your bank or credit union charges such a fee.

Can I get a checking account without a driver's license?

Banks and credit unions are required to verify your identity when you apply to open an account. The most common way to verify your identity is with a driver’s license. There are other ways banks and credit unions can verify your identity, so if you don’t have a driver’s license, ask the bank or credit union what types of identification it will accept. The rules leave some discretion to banks and credit unions on what forms of ID to accept.

Can I get a checking account without a social security number?

You are not required to have a social security number to open a checking or savings account. Many banks and credit unions will accept a Taxpayer Identification Number (TIN) instead. You will need to fill out a form with the Internal Revenue Service (IRS) to get a TIN. Some banks and credit unions also accept other forms of identification from foreign citizens.

Can I open checking or savings accounts with more than one bank at a time?

Yes. There are no restrictions on the number of checking and savings accounts you can open or the number of banks or credit unions with which you can have accounts.

 

Can I use the Military Savings Deposit Program SDP if I'm deployed overseas but not to a combat zone?

You can’t use the SDP unless you are receiving Hostile Fire Pay, but some banks or credit unions are now offering special interest-bearing accounts when a military customer deploys that may even match the SDP rate. You should ask your financial institution if they have any special products available to you during deployment.

Can I withdraw money while I am in the combat zone?

Once your account reaches a $10,000 balance, you may withdraw funds over $10,000 on a quarterly basis.

Emergency withdrawal must be approved by your commanding officer who must determine that it is necessary for the health and welfare of you or your family.

Can my bank/credit union charge me a fee to use another bank or credit union's ATM?

Yes. Both your bank or credit union and the owner of the ATM can charge you a fee. Your bank or credit union must disclose its fee in writing when you open your account or when it adds a new fee. The ATM operator must disclose its fee in writing at the ATM itself.

A deposit was credited to my account by mistake. Can the bank/credit union take it back?

Yes.

Does an ATM have to give me a receipt?

An ATM must give you the option to get a receipt for all transactions over $15.

Does my bank/credit union have to allow overdrafts?

No. Your bank or credit union may set and change its own limit on how often and by how much it will let each customer overdraw his or her account.

Does it take longer before I can withdraw money if I deposit a check using an ATM instead of inside the bank/credit union?

Probably. If you deposit a check at an ATM instead of inside a bank or credit union, your bank or credit union has more time under the law to make the funds available. If you deposit a check into an ATM not owned by your bank or credit union, it is allowed to take even longer.

The law generally requires funds you deposit at someone else’s ATM to be made available for withdrawal on the fifth business day following the banking day on which the deposit was made. There are situations where your bank or credit union may take longer to process your deposit, including for new accounts, for the portion of a deposit over $5,000, or for accounts with prior frequent overdrafts.

Does my bank/credit union have to send me a monthly statement for my checking account?

Not necessarily. Most banks or credit unions will send a statement every month. However, banks and credit unions only have to send a monthly statement if you made at least one electronic fund transfer that month.

Electronic fund transfers include ATM transactions, transactions using your debit card, and payments you make through online bill payment. It also includes direct deposits and any recurring payments automatically deducted from your account.

If you have made no electronic fund transfers, some banks or credit unions may send you a quarterly statement instead of a monthly statement. Many banks and credit unions also offer the option to sign up for electronic statements.

A financial planner offered to help with my bill paying and banking, but said the only way she or he could help is if I opened a joint account with both of our names on it. Is this true?

No. Hiring someone to help with financial services – whether it is money management, financial planning, or other services – generally does not involve or require adding the person’s name to your bank account.

Joint bank accounts usually enable all account holders to withdraw money and to retain the money in the account if the other owner dies. For this reason, you should be very careful about whose name you add to your bank account and be certain of what you are allowing that person to do.

If anyone – a financial services professional, money manager, or anyone else – tells you that he or she can only provide services if you add him or her to your bank account or otherwise give access to your money, you should think seriously about whether the person is a legitimate business or professional and whether you want their involvement.

There are ways that you can enable someone to help you with bill paying and banking, but you should only make arrangements with safeguards to ensure that a third party doesn’t misuse your money. Convenience bank accounts, powers of attorney (carefully written and granted to trusted individuals), trust arrangements, and others can accomplish your goals without unknowingly giving away your savings. You may want to consult an attorney to ensure that the arrangements you make are in your best interest.

How can I avoid debit card overdrafts?

You can avoid debit card overdraft fees by declining to opt in to debit card overdraft or by cancelling debit card overdraft coverage if you have opted into it.

There are alternatives to debit card overdraft. If you have a savings account at the same bank or credit union as your checking account, most banks and credit unions will allow you to link the two accounts. This way, if you overdraw your checking account, the bank or credit union will transfer money from your savings account to cover the overdraft. There usually is a fee charged when this occurs, but it is generally less than an overdraft fee.

Many banks and credit unions also offer an overdraft line of credit to consumers who qualify for such credit. If you qualify and overdraw your checking account, the overdraft will be covered by the line of credit. In essence, this gives you the ability to borrow money to cover an overdraft. There usually is a fee charged when this occurs. In addition, you will be charged interest on the amount you borrow to cover the overdraft. That fee and the interest charged are usually lower than the fee charged per overdrawn item in connection with a bank or credit union’s standard overdraft practices.

To reduce all overdraft-related fees, you should always track your balance as carefully as you can. It may be possible to sign up for low balance alerts through your bank or other service providers. These alerts can help you know when you are at risk of overdrawing your account.

If you have regular electronic transfers, such as mortgage payments or utility bills, make sure you know how much they will be and on what day they occur so you can ensure you have enough money in your account.

How can I put money in a Military Savings Deposit Program SDP account?

Deposits may be made in cash, by check, or through allotment. Once started, allotments may be increased or decreased as your financial situation changes. Your allotment will stop when you redeploy from the combat zone.

How can I reduce the costs of my checking account?

You can reduce the cost of using your checking account by taking the following steps:

Pay attention to what transactions or events are triggering fees. Find out whether you might be able to alter your banking behavior to avoid these fees. For example, you may save a few dollars by using your bank’s or credit union’s ATMs rather than those of another institution or by signing up for account alerts that help you stop from spending more than you have. Talk to your bank or credit union about possible solutions.

Avoid spending more than you have. Bounced check penalties can be significant, and overdraft fees are an especially costly way to borrow money. Keep careful track of the balance in your account and confirm that deposited funds are available before making a payment or withdrawal that might exhaust your account. Check your balance at the ATM before you withdraw cash, and see if you can sign up to get low-balance warnings via e-mail or text. You can also monitor your balance online.

Keep track of your account. Monitor your account online to keep track of what’s coming in and going out. If you have questions, ask your bank or credit union for an explanation. Review your account statement every month to make sure it’s correct. Report any errors immediately to your bank or credit union. Banks and credit unions must tell you when they change their terms of service, so any time you get a piece of mail from your bank or credit union, read it.

Reduce monthly service charges. Know the minimum balance requirement. Ask if direct deposit or electronic banking can lower the monthly fee. See if the bank or credit union offers a low-fee checking account for you, such as a seniors or students account, or just a basic checking account with a low minimum balance and a limited number of “free” checks and withdrawals. You may also be able to avoid monthly maintenance fees by consolidating accounts and maintaining a higher balance.

Shop around. Get a copy of your bank or credit union’s list of account fees, or ask about them, then compare them with account fees at other banks or credit unions. Assess your habits honestly and consider penalty fees, such as overdraft and non-sufficient funds charges, as well as monthly maintenance, ATM surcharge, and other service fees. When comparing banks or credit unions, also consider factors such as the hours of operation, locations, access to public transportation, available products and services, and reputation for customer service.

How can I request a copy of my consumer reporting agency report?

If you would like to see what checking account information is stored about you, you can request a free copy of your report at:

How do I avoid ATM fees?

Generally, use your own bank or credit union’s ATMs – most banks or credit unions charge no fee for this service. Usually, when you use another bank or credit union’s ATM, both the operator of the ATM and your bank or credit union charge you a fee.

Some banks and credit unions offer to rebate ATM fees for customers that maintain high average balances. Check with your bank or credit union to find out what ATMs you can use without an additional fee.

How do I avoid or minimize overdraft fees?

If you pay overdraft fees regularly, you are paying a lot for very short-term cash advances. Here are some steps to reduce those costs:

Track your balance. To avoid overdraft fees and not-sufficient funds (NSF) fees, you should always track your balance as carefully as you can. It may be possible to sign up for low balance alerts through your bank, credit union, or other service providers. These alerts can help you know when you are at risk of overdrawing your account. If you have regular electronic transfers, such as rent, mortgage payments, or utility bills, make sure you know how much they will be and on what day they occur. You also need to know when the funds you have deposited become available for your use, so you can ensure you have enough money in your account.

Opt out of overdraft coverage. If you are paying a lot of overdraft fees, consider opting out of overdraft coverage for debit purchases or ATM withdrawals. Without overdraft coverage, your card will be declined if you don’t have enough money in your account to cover a debit purchase or ATM withdrawal. You won’t be able to complete the transaction, but you won’t incur an overdraft fee either. If you have chosen a debit card overdraft program, you can change your mind any time. Just let your financial institution know and it must honor your change request as soon as reasonably practicable.

Link to a savings account. To reduce the costs of overdrafting, link your checking account to a savings account. If you overdraw your checking account, money will be taken from your linked savings account to cover the difference as long as you have sufficient funds in your savings account. You may be charged a transfer fee each time this happens, but it is usually much lower than the fee for an overdraft.

Get a line of credit. As an alternative to a linked savings accoutn, ask your bank or credit union if you are eligible for a line of credit or link to a credit card to cover overdrafts. You may have to pay a fee when the credit line is tapped, and you will owe interest on the amount you borrowed, but this is usually a much cheaper way to cover a brief cash shortfall.

The CFPB is currently looking closely at overdraft practices and collecting information about them. If you have an experience you would like to share with us, we’d like to hear from you.

How do I find a Personal Line of Credit?

Ask your bank or credit union if it offers this product. Most do, but they often require strong creditworthiness for approval.

How do I recognize and prevent against fraud after a natural disaster?

In times of crisis most Americans pull together. But some people may try to rip you off. Frauds take many shapes, but the con artists often use a handful of common tricks to manipulate our emotions. It is hardest to make rational decisions when emotions run high. 

Recognizing the tricks that con artists use, and the effects they have on us, can help you spot scams easier. The best way to avoid scams is to ask questions, lots of them. Asking questions puts you back in control and puts any crooks on the spot.

Avoid over-confidence. The first thing to remember is that most con artists are professionals. Anyone can be victimized by fraud. The problem is that most of us believe it will never happen to us. The more overconfident we are, research shows, the more susceptible we are to fraud. The best way to avoid over-confidence is to always be on the lookout for fraud, especially immediately after a disaster or other times of financial stress.

Don’t give credibility to titles and uniforms that can be faked. Con artists will often pose as government employees, insurance adjusters, law enforcement officials, bank employees, or whatever it takes to get to your money. Credibility can be easily faked. Always ask for identification. And never give personal information to anyone you don’t know. Also remember that government employees will never ask you for financial information or request payment of any kind.

Another common credibility scam is fake charities. These cons use names that are similar to national organizations to get you to make a “donation.” But your money ends up in their pocket. Never make donations over the phone. Make sure you get the organization’s name and contact information and review written materials closely.

Don’t fall for “limited time only” offers. Scarcity is common in disasters. But don’t let it get the better of you. Be suspicious of contractors or others offering to move you to the front of the line. Also beware of “opportunities” that force you to make a snap decision. You should never make a decision under pressure. Take your time. Never sign anything without fully reading and understanding it first. And if necessary, ask a trusted relative, friend, or attorney for a second opinion before acting.

How do I stop payment on a check?

Contact your bank or credit union right away if you want to stop payment on a check. Your bank or credit union may charge you a fee when you request to stop payment on a check.

Generally, state law provides that if you make your stop-payment request in time and in writing, the bank or credit union won’t be able to cash the check for six months. If you make the request by phone and do not follow up in writing, it won’t be able to cash the check for fourteen days. After your stop payment request expires, the bank or credit union can cash the check.

How do specialty consumer reporting agencies get their information, and what kind of information is in a report?

Banks and credit unions send information about checking account activity such as charge-off accounts and overdrafts directly to specialty credit reporting agencies that focus on checking information. In addition, individual merchants who have received bounced or fraudulent checks may forward this information to the agencies.

How long can I borrow funds with a Personal Line of Credit?

You may obtain credit up to your unused credit limit, and may re-borrow what you pay down. However, the bank or credit union generally reserves the right to suspend or terminate further credit at any time, without cause.

How long does information about me stay on my consumer report?

Consumer reporting agencies are required by law to remove most negative information about your account after seven years, which generally means that if you find an item in their report that is older than seven years you should dispute that information.

Note that consumer reporting agencies are not required to remove information about bankruptcies for ten years and that civil suits, civil judgments, and records of arrest can stay on for seven years or until the governing statute of limitations has expired, whichever is the longer period.

Consumer reporting agencies can always choose to delete data earlier than required by law.

How many overdrafts can I get in a single day?

Some banks and credit unions have their own maximum per day; check with your bank or credit union to see what its policies are.

The CFPB is currently looking closely at overdraft practices and collecting information about them. If you have an experience you would like to share with us, we’d like to hear from you.

How much can I borrow with a Personal Line of Credit?

Most banks and credit unions that offer this product will set the credit limit based on your creditworthiness and income. Because there is no collateral, these lines usually require strong credit.

How much can I deposit in the Military Savings Deposit Program (SDP)?

You can deposit up to $10,000 and earn interest at 10% APR. The maximum amount that can earn 10% interest is $10,000 (principal and accrued interest combined). Deposits may not be more than your unallotted current pay and allowances.

You cannot close your account until you have left the combat zone, although your money will continue to draw interest for 90 days once you’ve returned home or to your permanent duty station.

The interest you earn on your SDP account is not tax-exempt. More information is available in the Department of Defense Financial Management Regulations.

How quickly can I get money after I deposit a check?

Each bank or credit union has its own rules as to when it will let you access money after you deposit a check, but federal law establishes the maximum length of time a bank or credit union can make you wait.

Generally, if you deposit a check for $200 or less in person to a bank employee, you can access the full amount the next business day. If you deposit more than $200, you can access $200 the next business day, and the rest of the money the second business day.

Some banks or credit unions may make funds available more quickly than the law requires. If you need the money from a particular check, you can ask the teller when the funds will become available. A receipt showing your deposit does not mean that the money is available for you to use.

Your bank or credit union has a cut-off time for what it considers the end of the business day. If you make a deposit after the cut-off time, the bank or credit union can treat your deposit as if it was made on the next business day. A bank or credit union’s cut-off time for receiving deposits can be no earlier than 2:00 p.m. at physical locations and no earlier than noon at an ATM or elsewhere.

If your deposit is cash, a money order, a certified check, a check from an account at the same or another branch of your bank or credit union, or a check from the government, you can withdraw or use the full amount on the next business day if you make the deposit in person to a bank employee. If you make the deposit at an ATM at your bank, you can withdraw or use the full amount on the second business day.

It may take longer for you to access your deposit for a few reasons:

  • If you have a new account or if your account has been overdrawn too many times in the past six months;
  • If you make a deposit over $5,000;
  • If you make a deposit at an ATM owned by someone other than your bank or credit union; or
  • If the bank or credit union reasonably believes the deposited check may be uncollectible.

I bounced a check. Will this show up on my credit report?

It depends on what you wrote the check to pay. If you wrote the check to pay a bill, such as a credit card or mortgage, the creditor may report that you were late in paying your bill to the major credit reporting agencies.

Banks and credit unions usually don’t report a bounced check to the credit reporting agencies, but if you often write bad checks, the bank or credit unions may report that to a specialty credit-reporting agency that specializes in checking information. These companies collect information on consumers’ bank accounts, and having a bad record may make it harder for you to open a bank account in the future.

I cashed a check at my bank/credit union but later the check was found to be fraudulent. Do I have to repay the bank/credit union?

Yes. If your bank or credit union gave you cash from a check that was later found to be fraudulent, it can remove the funds from your account. If you believe you have been targeted by a scam, you should file a complaint with the Federal Trade Commission.

I closed my interest-bearing account, but the bank/credit union did not pay me interest up until the day I withdrew the money. Why?

If you closed the account before the bank or credit union credited the interest, generally the bank or credit union won’t pay that interest. This is known as “forfeiture of interest.” However, the bank or credit union must disclose this policy in the account agreement you received when you opened the account.

To find out your bank or credit union's policy, review your account agreement or ask your bank or credit union.

I deposited a USPS Money Order, Cashier's Check, Certified Check, or Teller's Check. When can I access this money?

These types of deposits are subject to next-day availability if the deposit was made in person to a bank employee, meaning that they are available the next business day after the banking day on which the deposit is made.

Only the first $5,000 of a deposit is subject to next-day availability. The rest must be made available in a reasonable time. Deposits made via your bank’s ATM may not be available until the second business day.

I discovered a debit card/online/ATM/automatic deduction transaction that I did not authorize. How do I recover my money?

Contact your bank or credit union immediately if you suspect an unauthorized debit card or other electronic fund transfer. Electronic fund transfers include ATM transactions, transactions using your debit card, some payments you make through online bill payment, and payments authorized to be deducted from your account automatically.

 

If you lost your card…

If you lost your card, code, or other access device, or it was stolen, and you notify your bank or credit union within two business days of discovering the loss or theft of the card, code or access device, you cannot be made to pay more than $50 or the transaction amount, whichever is less.

If you notify your bank or credit union after two business days, you could have to pay as much as $500. If you wait more than 60 days after the transmittal date of your next statement, you could have to pay the full amount of any transactions after the date of the statement.

If you didn’t lose your card…

If you did not lose your card or have it stolen, but an unauthorized transaction appears on your statement, you must notify the bank or credit union within 60 days of the date of the statement to avoid having to pay for transactions after the date of the statement.

What does the bank have to do once I report it? Can I get my money back?

Once you notify your bank or credit union, it generally has 10 business days to investigate the issue (20 days if the account has been open less than 30 days).

Your bank or credit union then has three business days to report its findings to you. If the bank or credit union can’t complete its investigation within 10 (or 20) business days as applicable, it must credit your account for the full disputed amount less a maximum of $50 while the investigation continues.

The bank or credit union must resolve the issue in 45 days, unless the transactions were conducted in a foreign country, were conducted within 30 days of account opening, or were debit card point-of-sale purchases. In those cases, you may have to wait as long as 90 days for the issue to be fully resolved.

The bank or credit union must correct an error within one business day after determining that an error has occurred.

If the bank or credit union determines that the transactions were legitimate, it must provide you with written notice before taking the money that was credited to you during the investigation out of your account. There are instances, such as tax liens or wage garnishment, where someone may take money out of your account to pay back a debt you owe and you will not be able to recover the funds.

TIP: Report your lost or stolen card within two business days of when you discover it is missing so you limit your losses to $50 or less, no matter how much is charged to your card.

I discovered an unauthorized check written on my account. What rights do I have?

Contact your bank or credit union as quickly as you can when you discover any unauthorized payment.

If the check was processed as an electronic transfer, you have additional protections under federal law.

If the check was not processed as an electronic transfer, you may have protections under state law.

I get my paycheck by direct deposit. When can I withdraw the funds?

It depends on what time the bank or credit union receives the deposit. The bank or credit union must make the funds available on the next business day after the banking day on which an electronic payment is received by the bank or credit union.

Note that a banking day is the part of the business day when the bank or credit union is open to the public. A business day does not include Saturday or Sunday, even if the bank or credit union is open, or federal holidays. This means that if the deposit is received by the bank or credit union on a Friday morning, the money may not be available until Monday (or Tuesday if Monday is a federal holiday).

Many banks or credit unions make electronically deposited payroll funds available immediately. Ask your bank or credit union about its policy for your account and your payroll deposit.

I have a checking/savings account at a savings association. Are the rules different for accounts at a savings association than they are for accounts at a bank?

Accounts at a savings association (sometimes called a thrift or a savings and loan) are generally governed by the same rules as accounts at a bank. Deposits held at savings associations are insured by the FDIC.

I have a joint account with someone who died. What happens now?

It depends on the account agreement and state law. Broadly speaking, if the account has what is termed the “right of survivorship,” all the funds pass directly to the surviving owner. If not, the share of the account belonging to the deceased owner is distributed through his or her estate.

I have a joint checking account with my spouse. I would like to remove my spouse from the account. Can I do that?

Generally, no. In most cases, either state law or the terms of the account provide that you usually cannot remove a person from a joint checking account without that person’s consent, though some banks may offer accounts where they explicitly allow this type of removal.

I have a joint checking account. The other person closed the account without telling me. Is that allowed?

Generally, yes. In most circumstances, state law provides that anyone who can write checks on the account has the ability to close the account.

I heard there is a special savings account for military members when they are deployed. Am I eligible for that?

The Military Savings Deposit Program (SDP) pays 10 percent interest while you are deployed in an SDP-eligible combat zone (you must be receiving Hostile Fire Pay). You can start your SDP account once you’ve been deployed for a minimum of 30 consecutive days or at least one day in each of three consecutive months. Any military finance office in theater can help you set up an account and the deposit method most convenient for you.

I lost a check written to me. Someone forged my signature on the back of the check and then cashed it. What can I do?

First, contact your bank or credit union right away to tell them about the situation. Next, tell the person who wrote you the check – they might be able to be reimbursed by their bank or credit union and write you a new check.

If the check was processed as an electronic transfer, you have additional protections under federal law.

If the check was not processed as an electronic transfer, you may have protections under state law.

I lost my debit card, or it was stolen, and someone took money out of my account. Can I get my money back?

Notify your bank or credit union immediately. You have protections under federal law in this situation.

I made a cash deposit into my checking account. I attempted a withdrawal later that day and was told I could not withdraw until tomorrow. Can the bank do this?

Yes. Generally, a bank or credit union has until at least the next business day to make your cash deposit available to withdraw or to use these funds to cover your checks and debits. If the deposit was not made in person to an employee of the bank or credit union, the bank or credit union must make the funds available the second business day after the banking day on which the cash was deposited.

I need some legal advice or representation. How can I find an attorney who specializes in elder law issues?

Federally funded legal programs for people 60 and older (known as Title IIIB legal services programs) can provide legal assistance on issues such as income security, health care, long-term care, nutrition, housing, utilities, protective services, defense of guardianship, abuse, neglect, and age discrimination. Legal assistance is targeted towards older individuals in social and economic need. Each program has its own priorities and eligibility guidelines regarding case acceptance and areas of representation.

Your senior legal aid program may be located at your local legal services program. You can also find out about your local legal assistance programs by contacting your area agency on aging.

I opened a "free" checking account. I received a notice from the bank/credit union stating that it had decided to start charging monthly fees. Can the bank/credit union do this?

Yes. A bank or credit union can start charging you fees on your account as long as the bank or credit union notifies you in writing at least 30 days before it starts charging fees and explains the change to your account.

However, once it starts charging these fees, the bank or credit unioncan no longer advertise that particular account as a “free” checking account.

Banks and credit unions have multiple types of accounts available, so make sure you review your own account terms.

I opened a "free" checking account but there are fees charged on my account. Can my bank/credit union do that?

If an account is described as “free” or “no cost,” it cannot have any monthly service fees, fees for exceeding a specified number of transactions, or any fees to deposit, withdraw, or transfer money. A “free” or “no cost” account also means that the bank or credit union cannot charge you a fee for not meeting a minimum balance.

However, a “free” account may still have certain fees such as ATM fees, overdraft fees, bounced check fees, balance inquiry fees, fees to stop payment on a check, fees on a dormant account, or check-printing fees.

I opened a new checking account and my bank/credit union won't let me withdraw my funds. Can the bank/credit union do this?

A bank or credit union is permitted to place a longer hold on deposits for new accounts. An account is considered new for the first 30 days after it was opened. The account would not be considered new if the account holder had another established account with the same institution.

Even if your account is not new, the bank or credit union can place a longer hold on deposits over $5,000. The first $5,000 of checks deposited in one day will generally be available no later than the second business day following a deposit. Everything above $5,000 must be available no later than the ninth business day following the banking day on which funds were deposited.

If you make a deposit after the cut-off time identified by your bank or credit union then it can treat the deposit as if it was made on the next business day.

I opted into debit overdraft but the bank/credit union still declined to allow a debit purchase I made. Can the bank do that?

Yes. Banks and credit union can decide whether to pay any particular item that would cause an overdraft.

I overdrew my account by only one penny yet was charged the full overdraft fee. What can I do about this?

Some banks and credit unions will let you overdraft your account by a small amount without a fee, so check with your bank or credit union to determine its policy. Try to avoid overdrafts even if your bank or credit union currently allows small overdrafts without a fee.

The CFPB is currently looking closely at overdraft practices and collecting information about them. If you have an experience you would like to share with us, we’d like to hear from you.

I received a check payable to both my spouse and myself. Do both of us have to sign the back of the check?

If the check is issued to two people, such as John and Jane Doe, the bank or credit union generally can require that the check be signed by both of them before it can be cashed or deposited.

If the check is issued to John or Jane Doe, generally either person can cash or deposit the check.

I received a check that someone forgot to sign. Can I still cash it?

Generally, the bank or credit union will likely either not accept the check or return it to you. You will have to get the person who gave you the check to sign it before you can cash it.

I received a check where the words and the numbers for the amount are different. Is this check valid and for how much?

Yes, this check is valid. If there is a difference between the words and the numbers, the amount spelled out in the words is used.

I received an email from my bank or credit union asking me to "verify" my account information. What should I do?

This may be a common scam, often referred to as “phishing,” to steal your account information.

Banks and credit unions never ask for account information through email. If you receive this type of email, you should immediately contact your bank or credit union (using a customer service number that you get from a different source than this email) and report it.

For more information on phishing scams, visit the FTC’s consumer alert page on its website. If you feel you have been the victim of a phishing scam, you can also file a complaint with the FTC.

I tried to cash a check at a bank/credit union where I don't have an account. The bank/credit union made me show identification. Is that allowed?

Yes, a bank or credit union can require identification before it cashes a check. However, if you are at a bank or credit union where the check is from and you show the identification they require, the bank or credit union must cash the check if there is enough money in the account on which the check is written.

I tried to open an account but was told that I had a negative report a credit bureau that had checking information about me. Who are they and what can I do about it?

When a bank or credit union evaluates your checking account application, it often will seek additional information about your credit and checking account history with a consumer reporting agencies.

Nationwide consumer reporting agency
A bank or credit union may evaluate your general creditworthiness by obtaining your credit report from one or all of the largest nationwide consumer reporting agencies – Experian, TransUnion, or Equifax.

Under federal law, you’re entitled to a free report from these agencies if a company using their report about you takes adverse action against you, such as denying your application for a checking account, and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting agency. You are also entitled to one free credit report from each of these nationwide agencies once a year. You can get the report at annualcreditreport.com.

Specialty Consumer Reporting Agencies
Banks and credit unions may also contact specialty consumer reporting that have information on checking history. Banks and credit unions contact these companies to find out if you have had prior difficulties using a checking account, such as writing bad checks or suspected fraud.

The most common time this information is shared is when you apply to open a checking account. If you are denied a checking account based in whole or in part on a report from any of these specialty consumerreporting agencies, you have the right to a free disclosure from the agency of certain information in your file. The notice you receive from the bank or credit union will give you the name, address, and phone number of the consumer reporting company and how you can contact it to obtain your free disclosure.

There are other specialty consumer reporting agencies that focus on your use of checks once you have established an account.

Free disclosures
Even if you don’t have a dispute with these specialty consumer reporting agencies, you can still review the information they have on you in their files. Under the Fair Credit Reporting Act, a federal law, consumers have a right to a free file disclosure every 12 months from nationwide consumer reporting agencies, including consumer reporting agencies that focus on check writing.

 

I was offered a pension advance. What is this? What should I look out for?

You should be careful if you get offers for pension advance products. These are offers to pay a lump-sum payout to military or other retirees who receive pensions. This payout is made in exchange for all or part of your monthly retirement pension payment. Though you might get a large amount of money up front, in the end you may only be paid a small amount of what you would have earned if you waited to receive your full pension payments.

There are many companies making pension advance offers on the internet. Many use patriotic-sounding names or logos. You should always research the terms and conditions to figure out whether their offers will actually help you in the long run.

Pension advance offers promise quick money, but the cost can be very high.  We’ve heard from veterans paying interest rates as high as 106 percent. In the end, these veterans have ended up keeping pennies for every dollar they borrow. 

Tip: Never give a creditor access to the account where your benefits are deposited.

I went to my bank or credit union and was told that money had been taken out of my account using a power of attorney (POA) I never signed. What can I do?

Your bank or credit union may have honored a forged power of attorney. Depending on your state’s POA law and the facts in a given case, your bank may or may not be liable for accepting a forged power of attorney. You can consult with an attorney about your bank’s liability for accepting the forgery.

Contact the branch manager immediately, report that you did not sign the POA, and request that the bank return the missing money to your account. Ask the bank staff to take a sample of your signature and have it notarized. Also, report the unauthorized withdrawal to the bank’s fraud security department, to prevent further theft from your account. Finally, report the theft to local law enforcement, and inform the bank that you are doing so.

I would like to be able to have my friend or family member help with my bill-paying and banking. What are my options?

You have several options, some of which involve opening specific types of checking accounts or creating specific legal documents that give another person the power to handle your money:

Informal help with money management 
If you are still able to handle your banking and bill-paying but would like some help going through the bills and budgeting, a friend or family member can review your bills with you and help you figure out which ones to pay and when. Under this arrangement, you still sign your checks and no one else is authorized to make account transactions.

If you have no friends or family members to help you with informal money management, there are organized programs that provide trained staff members or volunteers to help. To locate a money management program in your area, try contacting your local Area Agency on Aging.

You may also be able to find a money management program along with other resources for Older Americans by contacting the Eldercare Locator or by calling 1-800-677-1116.

If you get help from a money management program, check on whether the program has insurance or bonding so your money is protected in a worst case scenario involving mismanagement or theft by the person assisting you.

Joint account
If you would like to enable a friend or family member to write checks and make deposits on your behalf, you may open a joint account. Generally, everyone whose name is on a joint account can write checks, withdraw money, and make transactions. Similarly, if one of the account holders owes money, the creditor can try to collect from money in the joint bank account.

If the money in your joint bank account belongs to you, is not meant to be a gift to the joint account holder, and is meant to be folded in with your other assets for distribution according to your will or estate plan, you may be taking some risks by opening a joint bank account because:

  • Your friend or family member can withdraw money for his or her own use or mismanage your money
  • Creditors of your friend or family member may use legal processes to try to satisfy their debts from your money in the account
  • When you die, depending on the terms of the account and state law, money in the joint account may be distributed by the bank to the friend or family member whose name is on your account, without regard to the provisions of your will or other estate planning provisions

Convenience account
A “convenience account” or “agency account” enables you to designate a family member or friend to help you by depositing or withdrawing money and writing checks. A convenience account does not change the ownership of the money in the account or give your helper the right to keep the money when you die. Note, however, that any friend or family member you designate to help you can both deposit and withdraw money from your account, which exposes you to the risk that they might withdraw your money for their own use.

Tip: Ask your bank about opening a convenience account or agency account. Often bank employees don’t mention these options or may not know they exist. You may need to speak with a manager.Explain that you want an account in which the money remains yours but someone else’s name will be on the account to help you with bill paying and other transactions. Be sure to say that you don’t want the other person to have the “right of survivorship” if you don’t intend for your money to become your helper’s money upon your death.

Power of attorney (POA) for finances
You can name a friend or family member to act on your behalf by creating and signing a document called a power of attorney (or “durable” power of attorney). In that case, your bank account can remain in your name only, but the person you name in your power of attorney – your “agent” – can help you with banking. If you or your agent shares a copy of the power of attorney document with bank employees, they should honor the document and allow your agent to stand in your shoes to handle your bank transactions.

Again, give considerable thought before you grant anyone power of attorney, as he or she might withdraw money from your account for reasons that you do not specify.

I wrote a check and the person I gave it to increased the amount of the check before cashing it. The bank/credit union paid the higher amount rather than the amount I had written. What can I do?

Contact your bank or credit union as quickly as you can. If your bank or credit union cashed the check, you may be able to have the difference restored to your account. You are still responsible for the original amount of the check.

If the check was processed as an electronic transfer, you have additional protections under federal law.

If the check was not processed as an electronic transfer, you still may have protections under state law.

I wrote a check, and someone forged the endorsement and cashed the check. My bank/credit union won't return my money to my account. Am I responsible?

Contact your bank or credit union as quickly as you can after you learn of a forged endorsement. You are generally not responsible for a fraudulent endorsement as long as you report it within the period set by state law.

If the check was processed as an electronic transfer, you have additional protections under federal law.

If the check was not processed as an electronic transfer, you may have protections under state law.

I wrote a check. How can I tell if it was processed as an electronic payment or as a check payment?

Your monthly statement will often indicate if a check was processed as an electronic transfer, such as an ACH payment. If you need help understanding your statement, call your bank or credit union and ask for assistance.

If I deposit a check into an ATM, are the funds available right away?

No. There is no requirement to make funds from a check immediately available for withdrawal. The law generally requires funds you deposit at someone else’s ATM to be made available for withdrawal on the fifth business day following the banking day on which the deposit was made. Some banks or credit unions may let you withdraw deposits made at an ATM sooner.

If I link my credit card to my checking account to cover overdrafts, can the bank/credit union charge me a fee each time I use it to cover an overdraft?

If you link your credit card to your checking account to cover overdrafts, you can be charged a fee if the fee was disclosed to you.

In addition to the fee, the transaction will probably be considered a cash advance. This means you will be charged interest immediately on the amount charged to the credit card at the interest rate (or APR) for cash advances. This rate is usually higher than the interest rate for purchases. However, the total cost of paying an overdraft with your credit card is usually a lot less than the cost of paying an overdraft fee.

If I paid someone through my bank or credit union's online bill pay service, why did the person receive a paper check?

Most bill pay transactions are executed as electronic transfers. However, some payment recipients, including many individuals, do not have accounts that enable them to receive electronic payments from individual payers and must instead accept a paper check.

The interest rate offered for CDs (certificates of deposit) is low. Is there anything I can do about that?

You have many different options when choosing a CD that can affect the interest rate. Generally, you may be able to get a higher interest rate by selecting a later maturity date, which means you must leave your money in the CD longer. For example, a two-year CD generally will have a higher interest rate than a six-month CD.

Another possible option is a variable-rate CD, sometimes called a “multi-step,” “bonus rate,” or “step up” CD. The interest rates on these CDs may change according to rules explainedby the CD issuer. Choosing a variable-rate CD can increase or decrease your overall earnings for that CD.

“Callable CDs” may also offer higher rates. A callable CD is one in which the bank or credit union can end the CD agreement before the maturity date and return your money with the interest that has been earned to that point. Because you take some risk in not knowing whether your callable CD will reach full maturity, banks and credit unions typically offer higher rates on callable CDs than they do on other CDs. But, if the bank or credit union decides to “call” your CD early, you may be forced to withdraw your money or to reinvest in a product with a lower rate. The CD agreement will indicate whether or not your CD is callable.

The CD with the highest rate may not always be the best fit for your needs. You should look closely at the different terms to see what type of CD might be right for you.

Tip: If you are flexible about how long you can leave your money in the CD, ask if there are any promotional rates. Some banks and credit unions offer a promotional rate for a certain length of CD. If you pick the promotional CD, you may get a higher interest rate.

Is a money market account insured?

Yes. Like other deposit accounts, money market accounts are insured by the FDIC and NCUA up to $250,000 for each account holder.

Money market mutual funds, however, are not federally insured. These are offered by brokers and other entities that are not banks or credit unions.

If you have multiple accounts with a bank or credit union, talk to your bank or credit union to confirm your coverage.

For information on FDIC insurance, visit the FDIC’s Electronic Deposit Insurance Estimator on its website or call the FDIC Call Center at 1-877-275-3342 (1-877-ASKFDIC) (for the Hearing Impaired, call 1-800-925-4618). The NCUA has a similar web tool for credit union account insurance.

My bank offers a direct deposit advance or checking account advance. What is this?

Deposit or checking account advances let you borrow up to a certain amount of money (often $500) from your next direct deposit. However, this money, along with fees, will usually be automatically deducted from your next direct deposit when it goes into your account.

The fees attached to deposit or checking account advances can be high. In addition, you will have less money from your next direct deposit, because the bank will remove both the amount of money advanced and all the related fees. While this might be cheaper than incurring an overdraft fee, consider whether you will be able to meet your other obligations if your direct deposit is reduced, and whether other, lower-cost options are available.

My bank/credit union cashed a post-dated check even though I told them about the post-dated check before they received it. What can I do?

Generally, state law provides that if you notified your bank or credit union about a post-dated check a reasonable time before it received the check, your notice is valid for six months. During that time, the bank or credit union should not cash the check before the date you wrote on the check.

If you only gave an oral notice, without confirming it in writing, your notice is only valid for 14 days. After that, the bank or credit union can cash the check before the date you wrote on it. If your bank or credit union cashed a check before the date you put on it while your notice was still valid, then it may be liable to you for any damages.

My bank/credit union charged me a fee for overdrawing my account even though I never agreed to let them do so. What can I do?

For one-time debit card transactions and ATM withdrawals, banks and credit unions cannot charge you an overdraft fee unless you opt in. However, banks and credit unions are allowed to charge you overdraft fees when the bank or credit union pays a check or certain recurring electronic payments that would have overdrawn your account, even if you did not opt in.

Some banks may also allow you to opt-out of overdrafts for checks and other types of payments. However, consumers that decline overdraft coverage for checks or ACH transactions may be charged a non-sufficient funds (NSF) fee from the bank or credit union, which is generally the same amount as an overdraft fee. In addition, declined payments to merchants may trigger a returned item fee from the merchant.

If you had an account open as of July 2010, your bank or credit union may have sent you paperwork asking you to opt in to allow overdrafts on debit card transactions and ATM withdrawals. If you opened a new account since then, you may have signed a document authorizing overdraft protection when you opened the account.

If you are enrolled in a fee-based debit overdraft program, you can change your mind at any time. Just notify the bank or credit union that you don’t want debit overdraft coverage.

If you have chosen not to enroll in a debit overdraft program, the bank or credit union will decline ATM or debit card transactions when your account doesn’t have enough funds to cover them, and you will not be charged a fee when this happens. Your debit overdraft program enrollment should not affect whether the bank or credit union will allow you to overdraw your account on check or recurring electronic payment transactions, or the overdraft fees you pay when you do.

My bank/credit union no longer provides copies of my cancelled checks with my statement. Can the bank/credit union do that?

Yes. Banks and credit unions are generally not required by law to return cancelled checks or check images. Usually your monthly statement will include the check number, amount, and date of payment for each check you wrote. State laws also generally require banks and credit unions to keep a copy of all checks for seven years. Contact your bank or credit union directly if you need to obtain a copy of a cancelled check. However, some banks or credit unions charge a fee for this service. Some states have laws preventing a charge for the first two check images per statement cycle.

My bank/credit union offered to link my checking account to a savings account, a line of credit, or a credit card to cover overdrafts. How does this work?

Most banks and credit unions may offer you the ability to link a savings account, credit card, or line of credit to your checking account. Money will be taken from this account to cover transactions that occur when you overdraw your checking account.

Some banks and credit unions charge a fee each time a transfer is made. In addition, interest is charged on any amount that is placed on your credit line or credit card. Usually, the costs of paying overdrafts from a linked savings account or line of credit are considerably less than overdraft fees. You should compare the fees to other options to see what is best for you.

Some banks or credit unions have a minimum transfer amount (for example, $100) each time the bank transfers money from a savings account, or places a charge on a line of credit or credit card, to cover an overdraft. You should find out whether your bank or credit union has such a minimum.

My family member signed a power of attorney (POA) but when I took it to the bank/credit union, I was told the POA has to be on the bank/credit union's form. What can I do?

As long as the POA follows the laws of your state, banks, credit unions, and other third parties should accept it. Ask to speak to the branch manager, a supervisor, or an attorney for the bank or credit union.

Many state laws require banks and credit unions to accept POAs except under certain circumstances: for example, if the bank or credit union believes the POA is forged, knows that the POA was revoked, or believes that the person who created the POA is being abused or exploited by the agent.

If you continue to meet resistance, you may be able to get a court order mandating acceptance of the POA – and the person refusing to honor it may have to pay your attorney’s fees and the costs of taking him or her to court.

Tip: If you create a POA, share it with your bank or credit union in advance, to smooth the way for your agent down the road.

Should I enroll in direct deposit?

You should check into whether your employer offers direct deposit and how it would work for you. Direct deposit is usually safer and faster than getting a paper check or cash.

Some employers or payroll processing services will process direct deposits so that the funds are available on payday. Ask your employer about its policies. Generally, if you receive your pay through direct deposit, your funds will be available to withdraw at least as soon as if you had deposited a paper check, and often sooner.

Direct deposit may also enable you to avoid monthly maintenance fees on a checking account without maintaining a minimum monthly balance. In addition, direct deposit programs often enable employees to designate a portion of deposited funds for savings so you can save automatically with each paycheck.

Should I get a checking account that pays interest?

Some banks and credit unions offer checking accounts that pay interest, usually at very low rates. These accounts may have higher fees than checking accounts that don’t pay interest. These accounts may also require a larger minimum balance to avoid monthly fees. It is always a good idea to compare checking account fees and terms to see which account and fee structure will cost you less for the way you actually bank.

Tip: Because interest rates on deposit accounts are currently very low, fees and minimum balance requirements usually have a much bigger impact on the net value of a checking account than any interest you might earn on a checking account.

Someone bought something I was selling online and sent me a check or money order for more than the price of the item. They asked me to send back the difference. Should I be worried?

Yes, this is a common scam. Alert your bank or credit union and the online auction site or marketplace. Do not send any money to the buyer.

If you deposit a counterfeit money order, you will not receive any funds or, if the funds are deposited, you will have to pay them back even if you have already withdrawn them from your account. Alert your bank or credit union if you believe you received a counterfeit money order.

Tip: Don’t give out your account information to anyone you don’t know.

Someone stole my debit card number and used it. Can I get my money back?

Notify your bank or credit union immediately. You have protections under federal law in this situation.

Someone took money from my account without my permission. What can I do?

If you suspect that someone has taken money out of your account who was not authorized to do so, you should immediately call your bank or credit union and let it know. You should ask the bank or credit union to prohibit future debits from the person who made the unauthorized withdrawal from your account.

If the withdrawal was made as an unauthorized debit card or other electronic fund transfer, you may have additional protections under federal law. Electronic fund transfers generally include ATM transactions, transactions using your debit card, some payments you make through online bill payment, and payments authorized to be deducted from your account automatically.

If you lost your card…

If you lost your card, code, or other access device, or it was stolen, and you notify your bank or credit union within two business days of discovering the loss or theft of the card, code or access device, you cannot be made to pay more than $50 or the transaction amount, whichever is less. If you notify your bank or credit union after two business days, you could have to pay as much as $500. If you wait more than 60 days after the transmittal date of your next statement, you could have to pay the full amount of any transactions after the date of the statement.

If you didn’t lose your card…

If you did not lose your card or have it stolen, but an unauthorized transaction appears on your statement, you must notify the bank or credit union within 60 days of the date of the statement to avoid having to pay for transactions after the date of the statement.

What does the bank have to do once I report it? Can I get my money back?

Once you notify your bank or credit union, it generally has 10 business days to investigate the issue (20 days if the account has been open less than 30 days). Your bank or credit union then has three business days to report its findings to you. If the bank or credit union can’t complete its investigation within 10 (or 20) business days as applicable, it must credit your account for the full disputed amount less a maximum of $50 while the investigation continues.

The bank or credit union must resolve the issue in 45 days, unless the transactions were conducted in a foreign country, were conducted within 30 days of account opening, or were debit card point-of-sale purchases. In those cases, you may have to wait as long as 90 days for the issue to be fully resolved. The bank or credit union must correct an error within one business day after determining that an error has occurred.

If the bank or credit union determines that the transactions were legitimate, it must provide you with written notice before taking the money that was credited to you during the investigation out of your account.

There are instances, such as tax liens or wage garnishment, where someone may take money out of your account to pay back a debt you owe and you will not be able to recover the funds.

Tip: Report your lost or stolen card within two business days of when you discover it is missing so you limit your losses to $50 or less, no matter how much is charged to your card.

A telemarketer took money from my checking account even though I did not agree to buy anything. Can I get the money back?

Contact your bank or credit union immediately. You should tell your bank or credit union you never authorized this payment. You should also ask the bank or credit union to reverse the debit.

If the check was processed as an electronic transfer such as an ACH payment, you have additional protections under federal law.

In addition, the FTC Telemarketing Sales Rule requires any seller to get verifiable authorization (unless you pay by credit card or debit card), which means the telemarketer must get either a written authorization from you or a tape-recorded oral authorization. If the telemarketer chooses written authorization, it must send you a written confirmation of the transaction by first class mail and let you know of the procedures to receive a refund.

You may also have state law protections.

Is there a limit on how much I can deposit into my savings account?

No, you can deposit as much money in your savings account as you want.

If you have $250,000 or less in all of your deposit accounts at the same insured bank or savings association, you do not need to worry about your insurance coverage — your deposits are fully insured. If you have multiple accounts with different banks or credit unions, or if you have accounts totaling over $250,000, talk to your banks or credit unions to confirm your coverage.

For information on FDIC insurance, visit the FDIC’s Electronic Deposit Insurance Estimator on its website or call the FDIC Call Center at 1-877-275-3342 (1-877-ASKFDIC) (for the Hearing Impaired, call 1-800-925-4618).The NCUA has a similar web tool for credit union account insurance.

A "veteran's advisor" said he could help me get my Aid and Attendance benefit from the Department of Veterans Affairs (VA) for a fee? Is this legitimate?

You should not pay a fee to apply for your Aid and Attendance benefit – if you are eligible for this benefit, you can apply for free.  There are many experts recognized by the Department of Veterans Affairs (VA) who can help with the application process, but they should not charge you any fees to do so.

You might be eligible for an Aid and Attendance benefit if you are a severely disabled veteran who is eligible for a VA pension and needs daily assistance. This benefit helps pay for professional care in your home, in an assisted-living facility, or in a nursing home. The VA will decide if you qualify for this benefit by looking at whether your total assets are below a certain amount. Take a look at this factsheet to learn more about how to apply for the Aid and Attendance benefit.

You should beware of offers like:

  • A lawyer or “veteran’s advisor” who offers to get the Aid and Attendance benefit – for a fee. Federal law prohibits VA-recognized advisors from charging to assist with VA claims. If an advisor or lawyer is charging a “consultation fee” up front, they are probably not recognized by the VA.
  • A paid advisor who claims to be able to get the benefit for you more quickly than anyone else. All VA claims go through a standard evaluation process that no one can bypass to get it done faster.
  • An advisor who offers to help you qualify for the Aid and Attendance benefit even if you have too much money to qualify. They may offer to take control of your finances so they can move assets into an inaccessible trust. This could disqualify you from other benefits and possibly result in even worse consequences, so you should never agree to these services.
  • Retirement homes that claim that you will qualify for the Aid and Attendance benefit in order to get you to agree to enter their housing. If your claim is denied, you may not be able to afford to remain in the facility.

What is the best way to move my checking account to another bank or credit union?

If you decide to move your checking account to another bank or credit union, here’s how to make the transition a little smoother:

  • Open the new account first.
  • List all the automatic deposits and withdrawals scheduled to go in and out of your old account each month. Be sure to include any bills you have authorized to be paid directly from your checking account, such as utility bills or credit card bills.
  • If you have direct deposit, fill out the papers directing your employer to reroute your paychecks to your new account. Do the same for any other direct deposit, such as Social Security payments.
  • Find out the date your direct deposits will transfer. Once you know the date of the first direct deposit, arrange for your automatic debits and withdrawals to be made from your new account and be sure to cancel them from your old account.
  • Leave enough money in your old checking account to cover any checks that haven’t cleared or automatic payments that haven’t been made to avoid any fees.
  • Once you’re certain all direct deposits and automatic payments are coming in to and going out of your new account, transfer the remaining funds from your old checking account into your new account. You can do this fastest electronically or by using a cashier’s check. Using a personal check may be cheaper than using a cashier’s check, but there may be a longer wait before it is available in your new account.
  • Once the transfer clears your new account, close the old account. Get written confirmation that the account has been closed.

What is a certificate of deposit (CD) rollover or renewal?

A rollover or renewal can occur at the end of the term of a CD. If your CD has a rollover or renewal, the money you originally deposited will be invested in a new CD. The interest already earned may also be invested in the new CD. Some CDs don’t have a rollover feature so when they mature they will stop earning interest.

Your bank or credit union may rollover your CD automatically at the end of the CD term unless you tell them not to. However, a bank or credit union is required to send you a notice in writing before the CD matures, and the notice will tell you when your current CD ends and whether it will renew automatically.

Tip: Compare rates before you roll over or renew an existing CD. The interest rate for the new CD is not guaranteed to be the same as the interest rate for your current CD – it may be higher or lower. You may want to see if your bank or credit union is offering a promotional rate that is better than the rate on the rollover or renewal CD.

What is a certificate of deposit (CD)?

A certificate of deposit (CD) is a special type of savings account offered by banks or credit unions. A CD is also called a “time deposit.” You generally must keep your funds in the CD for a specified period of time to avoid penalties. The end of that time period is called the “maturity date.” The size of the penalty you will pay if you remove money from a CD before the maturity date will vary. You can find out what the penalty is before you purchase a CD. Some institutions may agree in advance to waive the penalty for withdrawing the money from the CD before its maturity date if you have held the CD for a minimum period of time. CDs offered by banks are insured (up to $250,000) by the Federal Deposit Insurance Corporation (FDIC), while those offered by credit unions are insured up to $250,000 by the National Credit Union Administration (NCUA).

Tip: Select your CD maturity date based on your expected needs. For example, if you will need the money you are going to invest in a CD in five years, you should compare the terms of CDs offered on the assumption that you will withdraw the money at that time.

What is a credit union share draft account? Is it a checking account?

Credit unions refer to checking accounts as share draft accounts. While it might not affect how you use the account, share draft accounts are a form of ownership. This means you are a partial owner of the credit union, while checking account owners are customers of banks.

What is a demand draft, telephone check, or preauthorized draft?

A demand draft allows someone to withdraw money from your checking account without your signature. It is also called a telephone check or preauthorized draft. The person taking money out of your account is supposed to have your permission and your account number and routing number. Giving out this information gives someone the means to withdraw money from your account. This can be done electronically or in person at a bank or credit union.

Demand drafts can be used to scam consumers. Be careful about giving out your account information.

What is the difference between a checking account, a demand deposit account, and a NOW (negotiable order of withdrawal) account?

A demand deposit account is a checking account. Most demand deposit accounts (DDAs) let you withdraw your money without advance notice, but the term also includes accounts that require six days or less of advance notice.

NOW accounts are essentially checking accounts where you earn interest on the money you have deposited. With a NOW account, the bank or credit union has the right to require at least seven days written notice of a withdrawal, though this is rarely done.

Not all accounts that give you checks are “checking accounts.” Other deposit products, such as money market accounts, may allow you to write checks, but they are not generally suited for day-to-day business, given the restrictions on their use. In addition, a lender may give you checks to access credit, such as a personal loan, home equity loan, or other lines of credit. These types of checks allow you to access your loan.

What do I do if the ATM gave me the wrong amount of money?

If the ATM gave you the wrong amount of money, you should immediately call your bank or credit union. If your bank or credit union does not own the ATM, you should also call the ATM owner. Make sure you keep your receipts and explain what happened.

What does it mean for a check to be endorsed "for deposit only"?

If you write “for deposit only” on the back of a check made out to you and then sign your name, the check can only be deposited in your account. This is called a “restrictive endorsement,” and it should prevent you or any other person from cashing the check. If you receive a check that was made out to someone else and that person endorsed it “for deposit only,” you should not be able to cash it.

What happens if I do not pay back my Personal Line of Credit?

Your account may be suspended. The lender may also be able to take the money you owe directly from your checking account or any other account you have at that bank or credit union. This is called “setoff.”

Setoff is not permitted for credit card accounts, but is permitted for personal lines of credit. Read your contract before you sign it so you know what you are agreeing to.

Not paying back your Personal Line of Credit may also negatively impact your credit score and history, which could impact your ability to get credit in the future. You may also be liable for collection costs in some states.

What if I need to withdraw money from my Military Savings Deposit Program (SDP) account prior to 120 days after leaving the combat zone?

If you want your funds before the 120-day period ends, your myPay account provides an automated request option for Military Savings Deposit Program (SDP) participants.

You can also send a request including your name, Social Security number and date of departure from the combat zone:

What is an overdraft?

An overdraft occurs when you don’t have enough money in your account to cover a transaction, but the bank pays the transaction anyway. You can overdraw your account through checks, ATM transactions, debit card purchases, automatic bill payments, and electronic or in-person withdrawals.

Many banks and credit unions offer overdraft protection programs in which the bank or credit union generally pays the transaction and charges you a fee (in addition to requiring repayment of the overdraft amount). Overdrafts can also be covered through a transfer of funds from a linked account, credit card, or line of credit.

Tip: Know your fees. Banks and credit unions have different fees associated with overdraft protection so be sure to ask what the account terms are with respect to the cost of overdraft protection, a linked account or a line of credit, when shopping for a checking account.

Tip: Deposits to your account may not be immediately available for your use. Always make sure you have sufficient available funds in your account. Even if you just made a deposit, you may still overdraw your account.

What is a money market account?

A money market account is a special type of savings account offered by banks and credit unions. Money market accounts are sometimes called money market deposit accounts or money market savings accounts.

Like a regular savings account, a money market account at a bank is insured by the Federal Deposit Insurance Corporation (FDIC), while one at a credit unionis insured by the National Credit Union Administration (NCUA). You cannot withdraw money or make payments more than six times a month from a money market account by check, debit card, draft, or electronic transfer. Withdrawals or payments by ATM, in person, by mail, messenger, or telephone check (where payment is made by using your checking account number and bank routing number) do not count against the six-transaction limit. Your bank or credit union may also have a minimum deposit that it requires to open a money market account.

A money market account is different from a money market mutual fund, or a money market fund. Money market funds are offered by investment companies and others. Money market funds are not insured by the FDIC or the NCUA, which means you could possibly lose money investing in a money market fund.

What is a Personal Line of Credit?

A Personal Line of Credit is a loan that you use like a credit card account that you access without using a card. Instead, you write special checks or request a transfer to your checking account by phone or online.

Like a credit card account, you have a credit limit, receive a monthly bill, make at least a minimum payment, pay interest based on your outstanding balance, and possibly pay a fee each time you use the account.

Personal Lines of Credit are unsecured, unlike Home Equity Lines Of Credit (HELOCs) , which are backed by a mortgage on your home. Personal Lines of Credit are offered by banks and credit unions and usually require that you also have a checking account with the same institution.

What is a power of attorney (POA)?

A power of attorney (POA) is a legal document that allows someone else to act on your behalf.

Powers of attorney can be helpful to older people and others who want to choose a trusted person to act when they cannot. Creating a POA is a private way to appoint a substitute decision-maker and is relatively inexpensive, although it may involve help from a lawyer. If you don’t create a POA in advance, a friend or family member might have to go to court to have a guardian appointed – and that process can be lengthy, expensive, and very public.

A financial POA can be used as a tool for planning for future incapacity – an inability to make financial decisions due, for example, to dementia, traumatic brain injury, or some other impairment that affects mental function. When used for advance planning, a POA generally is “durable,” meaning it continues to be effective even if the person creating it becomes incapacitated.

A financial POA can also be used for short-term purposes: for example, if a servicemember is deployed overseas, he or she may create a POA so someone can pay bills, sell property, or handle other business in his or her absence.

However, a POA does involve some risk. It gives someone else – your agent – a great deal of authority over your finances without regular oversight.

POA abuse can take many forms:

  • The POA document itself may be a forgery
  • Your agent might pressure you for authority that you do not want to grant
  • Your agent may spend your money on himself rather than for your benefit
  • Your agent might do things you didn’t authorize him to do – for example, make gifts or change beneficiaries on insurance policies or retirement plans

Many states have laws in place to allow your agent to act appropriately on your behalf and to prevent POA abuse. To find out more about legal services in your state, contact your area agency on aging.

TIP: Protect against POA abuse by doing the following:

  • Trust, but verify. Only appoint someone you really trust and make sure they know your wishes and preferences. You can require in your POA that your agent regularly report to another person on the financial transactions he or she makes on your behalf.
  • Tell other friends, family members, and financial advisers about your POA so they can look out for you.
  • Remember that POA designations are not written in stone – you can change them. If you decide that your agent isn’t the best person to handle your finances, you can revoke (cancel) your POA.
  • Beware of someone who wants to help you out by handling your finances and be your new “best friend.” If an offer of help seems too good to be true, it probably is.

What should I look for when shopping for a Personal Line of Credit?

Look at the APR, whether and how much the APR can change, any fees to access the line, annual fees, late payment fees, and fees for other events. Compare the costs with other types of credit that may be available to you.

When I pay a bill online, can the bank/credit union take the money out before the date I scheduled the payment?

Different banks and credit unions use different systems for scheduling and making online bill payments. Some banks and credit unions may choose to deduct the funds from your account early if you are a new customer or if you have a large amount of money scheduled for bill pay.

In addition, the time frame required to process a payment depends upon whether the bank or credit union is able to pay the payee electronically or must issue a paper check. Paper checks often require more lead time.

Most banks and credit unions’ online bill pay services let you schedule a payment on a particular “send date” so that it will get to the payee on a particular “arrival date.” While some banks and credit unions debit funds from your account on the arrival date, other banks and credit unions debit funds on the send date. Ask your bank or credit union about when it normally debits bill payment funds.

When will my participation in the Military Savings Deposit Program (SDP) end?

Your account will be closed and all funds returned to you via direct deposit 120 days after leaving the combat zone.

Why do I have to pay the bank/credit union back if a check I deposited turns out to be fraudulent?

If your bank or credit union credited your account fraudulently, the bank or credit union can remove the funds from your account. It is entitled to recover funds that were fraudulently transferred and to take steps to reverse a fraudulent transaction. If you believe you have been targeted by a scam, you should file a complaint with the Federal Trade Commission.




Copyright © 2013 by Mark McCracken , All Rights Reserved