7 day notice to with draw from your bank account?

I think with everything electronic these days they should be able to accomplish this in less than 7 days. But I do see your point.

Hello All, Aren't these bank accounts for depositors who have a substantial amount of money in these accounts? It shouldn't seem to matter to the bank if account holders had little money in them. Hopefully, this will never start in this country, but if it does maybe folks should start putting money under their mattresses instead of the bank!

Usually banks consider deposited checks to be "uncollected funds" and do not add them to the "available balance" until they clear the financial institutions that hold the accounts the checks were written on.

I didnt know this. But I think it is important to know that it is a possibility.

ladeboheme - I just looked at the article again. Where it states UPDATE: According to Stoll, Citi issued a statement saying that it has been required to make this change by Federal regulations--and it no longer sounds like it's limited to Texas: Update: Citibank has now released the following statement by way of explanation: "When Citibank moved to unlimited FDIC coverage in 2009, we had to reclassify many checking accounts to allow for immediate withdrawals in order to ensure all customers qualified for the additional coverage. When we moved back to standard FDIC coverage with most major banks in 2010, Citibank decided to reclassify those accounts back to make them eligible again for promotional incentives. To do so, Federal Reserve Reg D requires these accounts, called NOW accounts, to reserve the right to require a 7-day notice of withdrawal. We recently communicated this technical requirement to our customers. However, we have never exercised this right and have no plans to do so in the future." was not there when I originally posted this discussion. Thank you for pointing this out.

NOW accounts are different from Demand Accounts. They are interest eligible accounts and as such your deposits are actually loans to the bank which they pay you interest on. They need 7 days notice before you withdraw, because they lend that money out to others. Regardless of whether they've ever exercised this right or not, the fact that they could if they needed to remains. The fact that they don't have in reserve the total amount in deposits if everyone asked for their money at once also remains. Moreover, the FDIC does not insure accounts in full, there is a maximum limit. "The standard maximum deposit insurance amount is described as the “SMDIA” in FDIC regulations. The SMDIA is $250,000 per depositor, per insured bank, through December 31, 2013. On January 1, 2014, the SMDIA is scheduled to return to $100,000 per depositor, per insured bank, for all account ownership categories except Certain Retirement Accounts, which will remain at $250,000 permanently per depositor, per insured bank. "

This is CitiBank, I wonder if others will try this?

I agree, frightening!

Did you read the whole article? See my post above. Everybody is getting up in arms for nothing.

good point rolo

Read my post above and read the whole article (link posted in laglen's OP). Everybody is taking this at face value and jumping to conclusions. Most major banks do this to comply with FDIC regulations. They have the right, but that doesn't mean they have to use it and they usually don't.