Introduction to the Expedited Funds Availability Act
The Expedited Funds Availability Act (EFAA), a beacon of hope for those who love seeing their deposit numbers go up real quick, governs how swiftly banks must make funds available to their customers after a deposit is made. This piece of legislation, enacted back in 1987 when hairstyles were big and mobile phones were not, was a landmark move to standardize the frustratingly varied hold periods imposed by banks.
Why Should You Care About EFAA?
Shorter hold periods mean quicker access to your money. Before EFAA, banks might have treated your checks like fine wine, letting them age gracefully before letting you have a single penny. Now, it’s more like a fast-food turnaround. Here are the highlights:
- Prompt Availability: The EFAA requires banks to make funds from most check deposits available within one to three business days.
- Types of Holds: Understand different holds like statutory, large deposit, new account, and exception holds, and know when your cash will be free to party in your account.
Hold Types Under EFAA: A Closer Look
Statutory Holds
The “Welcome to Banking” hold. The first $200 must make an appearance in your account by the next business day - it’s the law!
Large Deposit Holds
Got a fat check? More than $5,000 on one day puts you in the large deposit club. The rules here are a bit stricter, allowing the bank to hold onto the bulk of your money a bit longer, just to make sure everything checks out.
New Account Holds
New to the bank? They might give your deposits the cold shoulder for up to nine business days. Consider this the banking equivalent of “let’s take things slow.”
Exception Holds
This is the wildcard. If the bank thinks something’s fishy or your account enjoys bungee jumping into overdraft territory, they might hold your check hostage a bit longer.
The EFAA and You: Navigating Bank Deposits Smartly
Understanding EFAA means never having to say, “Where’s my money?” at the bank again. With this act, your financial transitions can be as smooth as your morning coffee, ensuring you’re not left waiting unnecessarily for your own funds.
Related Terms
- Check Hold: The period a bank can legally keep your money from a deposited check out of arm’s reach.
- Banking Day: Any day a bank is open and doing business, which surprisingly doesn’t include weekends or holidays for most.
- Regulation CC: Another name for the rules set out by EFAA. It’s not just a cool sounding double letter at the end; it’s your ticket to quicker cash.
Suggested Books for Further Studies
- “The Check’s in the Mail”: Understanding Banking Promises by I.M. Waiting
- “Speedier Spending: How EFAA Changed the Banking Landscape” by Quik Cashley
In a nutshell, the Expedited Funds Availability Act is your financial ally, ensuring that the only thing you need to worry about is how to spend your money, not when you can spend it. With this guide, walk into your bank like you own the place (or at least like you understand the place), equipped with the savvy to manage your deposits effectively!
