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Ronald Frederick
Ronald Frederick, Attorney
Category: Legal
Satisfied Customers: 122
Experience:  14 years as an attorney in Ohio
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My husband receives a monthly military retirement, which goes

Customer Question

My husband receives a monthly military retirement, which goes directly to our checking account via direct deposit. Unlike previous banks, our current bank holds the deposit, which should occur on the 1st of the month, until their next business day, which does not include weekends or holidays. Is this legal?
Submitted: 8 years ago.
Category: Legal
Expert:  Ronald Frederick replied 8 years ago.

Yes, it is legal. Regulation CC governs a bank's responsibility to credit ones account. The regulation sets a maximum waiting time to give credit. For electronic transfers the money must be made available by midnight of the day received. Thus the money will be available to you the next business day from the date of receipt.


A bank may chose to make the money available at an earlier time as the regulation sets the outer time limit.



I hope this helps.




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Customer: replied 8 years ago.
The bank receives the deposit at least 2 days prior to the 1st, sometimes as much as a week. All of our previous banks deposited the money the day they received it, but Key Bank does not. They state that they have no responsibility to us until the scheduled day of our pay. My point is that they are earning interst on our money, which does not seem right.
Expert:  Ronald Frederick replied 8 years ago.

How do you know they are recieving the money at least two days before the first?


What service is he retired from?

Customer: replied 8 years ago.

He is retired from the Navy.


For years we had our direct deposit with the Navy Credit Union. A friend who worked there confirmed that our deposits always went in early because they were required to post them on the day they were received. So, after dealing with a couple of civilian banks, where checks also went in early, I had assumed that this would be the case. However, after dealing with Key Bank, I contacted the Defense Finance Office to inquire as to the current policy, and was told that this is still the case for all government checks.