Why does it take 5 days (or longer) for a check to "clear", but withdrawals happen in a few minutes?

Question

Why does it take 5 days (or longer) for a check to "clear", but withdrawals happen in a few minutes?

Answer 1

Checks  from  other  account  holders  in my  institution

Do  not  take  5  days ,

But   those  from  Other  banks  and  especially  out  of  state

Need   time  to  process  and  verify  funds .

With drawl  is  just  that ,  and  it  is  recorded  as   it  happens .

Not  sure  What  the  mystery  here  is ,

Are   you  new  to  banking  ?

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Answer 2

It's a two-pronged answer, and both ways make more moolah for the bank.

the 1st, which has already been addressed, is the bank holding the funds wants to hold it as long as possible to collect interest. (there is a law that the greed mongers of yore helped to get passed which allows this.)  They pay you 0.25% yet make 5, 6, 7% on loans, so when it's in their possesion, it's worth more.

the 2nd reason is when debits can happen within minutes, the chances are much greater that you, thinking that check you deposited last week is good, will withdraw on it and not have sufficient funds to cover it, so the bank can charge you outragous fees while transferring YOUR OWN MONEY from an overdraft ptotection account they've already convinced you into opening up.

Either way, it's a money maker for the greedmonger banks, and chase leads the way.

Answer 3

Because, banks would much rather take your money than let you use it, for yourself.. Most banks can deposit that money in a special account, and draw interest off of it, for the 5 to 10 days that it takes to 'clear', and put it to use as THEY want to.