Never understood how the process works and how the person offering money benefits from this. What do the IRS and banks (Chase, Capital One, Wells Fargo, etc.) do to get rid of this.
In: Economics
There is a TON of great information here, and a TON of TERRIBLE information here.
For everyone throwing in their two cents of ” yeah, I deposited a huge check, and it took a few days to clear.”
Please stop. Your check didn’t clear that quickly. This is exactly the misinformation that scammers hope you believe so they can scam you. You think it “cleared” in a few days because it’s available and you can no longer be scammed. So people get a false sense of security and send the money.
Checks take weeks to actually clear and often up to a month. The federal reserve forces banks to make the funds available to you quicker, long before it’s cleared for convenience.
Here is the specific law.
The Federal Reserve has set baseline rules for check deposits: The first $225 must be available the next business day, while amounts from $226 to $5,525 must be available within two business days after the deposit, and amounts of $5,525 or more generally should be accessible on the seventh business day
All of the above is faster than a check typically clears and hence opens the doors up for scams.
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