kahunaburger

It’s tax season. I was a good boy this year and my returns were filed weeks ago. On Friday I already received my refund from the State of New Mexico (thanks Katherine!).

On Monday morning, right after dropping Pia off at school, I headed to Wells Fargo and deposited the check. When I looked on Monday afternoon, I saw that the transaction was still pending, but then in the evening the moneys had arrived in my checking account.

I only have emergency funds in my Wells Fargo account and everything else is over at E*Trade. So, Monday evening I initiated a transfer of the newly added funds to my E*Trade savings account. One second after hitting the “Transfer” button, I saw that my WF checking balance had already reflected the transfer.

Today is Thursday and earlier in the day, I saw the transfer appearing at E*Trade with a “pending” notice. I suspect by the end of the day, the money will actually be available for withdrawal.

That makes a total of 3 days where the 1500+ dollars were floating around in financial no-mans land. Where were they? And what’s taking them so long?

I’m certainly aware that this is one of the areas where banks make a lot of their money: getting pennies (or fractions thereof) of interest on money that they don’t own. And old banker friend of mine back in Europe also once told me, that his employer made massive amounts of money from those fractional amounts in normal transactions: if you were to get 0.333 dollars, you got credited 0.33 and the bank pocketed the 0.003 – for 0.339, you would still get 0.33 with the bank keeping the 0.009. Multiple that by a few million transactions per day and you end up with a nice chunk of money.

That three day delay to move money from one bank to another made sense when the financial market was not standardized yet – when bankers still had to fax transfer slips from one bank to the next. But it does not make sense now where my check card purchase at the grocery store appears seconds later at my online banking site. I’m sure the inter-bank network is as good as the network going from the grocery store to my bank.

It just feels like another area where the customer is getting screwed …

PS: While I was walking the dogs I remembered the following. Had I gone to Wells Fargo on Tuesday morning and taken out the money from my account in cash and then had I gone over to another local bank, deposited the cash, it would have been available on that same Tuesday …