So I gained facetiously inquiry by someone at work-related if I could write castle a check for a million dollars. Ns told lock that ns could, yet that didn’t median it would be any good. As I recurring the story to someone else, a man idea popped into my head: I write a examine to myself for some ludicrous quantity of money, climate deposit it into the account that the check is being attracted on. Don’t ask me why ns would perform this, this is purely a hypothetical situation with no useful applications that i imagine banks might not truly be prepared for it.

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What would happen? that is, mechanically, what measures would it is in taken in the handling of the check? I very doubt any bank’s device is collection up to formally neglect a inspect in the extremely rare instance that that being drawn from and deposited come the very same account. If the examine were come be deposit into any kind of other account the I hosted other than the one it to be being drawn on, it would definitely not it is in honored, yet the just time the bank would ever before see the check it would be being presented for deposit come the very same account the being drawn from. Would they charge me a fee for overdrawing mine account also though I’m spanning the debit all at once with an similar credit? would they post the transaction to my transaction history? If so, what would occur if the lot of the inspect were so large that it can not be shown in the traditional manner?

If it matters, I bank with PNC.


Why not provide it a try? create yourself a check for something much less than your balance and deposit it. If they provide you a hard time, tell castle it’s for Science.

Depositing a inspect that you understand isn’t good into another account in order to take advantage of the sluggish communication and also claim the “funds” before the 2nd bank realizes you didn’t have that lot in your account at bank one is called examine kiting and is typically illegal.


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robert_columbia:

Why not provide it a try? write yourself a check for something much less than your balance and deposit it. If they give you a difficult time, tell castle it’s for Science.

Open another account first, and also experiment for scientific research with that one. Otherwise, you might screw up everything, including your mortgage or rent.


Several years ago, ns deposited a pair hundred checks earlier into the account lock were created on. These were prize money checks for an event, and many went un-awarded. But our treasurer felt that it would certainly be much easier to reconcile the account if all these checks to be deposited fairly than left as missing check numbers.

It operated fine. The bank tller noticed, and also pointed out to me the this deposit would have xero net result on the account. Ns explained, and also she claimed OK, take it them, and also processed them with the continuous process. They proved up just as regular on the monthly statement.

Of course, us had sufficient funds in the account come cover all these checks and also more.


I think this might be thought about a system for abusing the account, due to the fact that there might be a time after ~ the deposit is recorded and also before the handling is finished during which the account balance rises by the amount of the check. Not that i have operated in a financial institution or have any type of reason to know this. The point is, if you can imagine a way this temporary inflates the account balance, then financial institutions would have actually a great reason to have thought that it and also include formal dealing with of the case in their large automated system.


I in reality did this a couple of months ago, albeit no for a million bucks. Ns was creating a inspect for my fifty percent of the rental to mine roommate, yet we somehow combined up ours checkbooks (they were from the exact same bank) and also so I an extremely generously composed her a huge fat examine out the her very own checkbook! The deposit posted and also the retract cleared pretty much at the very same time.


Banks space really great at conveniently taking money the end of one account and also maximizing the moment to add a deposit. The financial institution would withdraw the money the the check. Host on to it for a while. Climate deposit it. If the lot is end what is in the account, that is bad.


Joey_P June 9, 2013, 12:41pm #8
t-bonham
scc.net:

Several year ago, i deposited a pair hundred checks ago into the account lock were composed on. These to be prize money checks for an event, and many went un-awarded. However our treasurer felt the it would certainly be much easier to reconcile the account if every these checks to be deposited rather than left as missing check numbers.

We perform that all the time at occupational with payroll checks. About fifty percent of them, our employee cash at occupational (out that the register). I could (to conserve what the financial institution charges united state for depositing and also drawing them) no deposit them, however for publication keeping, it’s much easier to deposit them. Then they present up ~ above my continual monthly explain and, if who should ever tell that they shed a check and also ask because that a new one, ns can show them the cancelled check. Also, now, v cancelled checks gift online, i don’t have to save lock anymore, so that’s less document that I have actually in storage at mine place.


Thank you for the replies. Ns was totally unaware that people actually walk this top top a continuous basis. As for the large check issue, i asked the question of various other people and one stated that the bank would probably charge you every little thing fees they could think of because that doing it, just because they could. I fully forgot about the truth that among the ways banks make money is come debit accounts immediately and also not write-up the credit till the preferably time as required by law, making this experiment of mine obviously a terrible idea.


You can write yourself a inspect on Friday afternoon, for a million dollars you don’t have, and deposit it in one interest-paying account. Climate walk over to the home window that says “Items in ~ this home window will be posted on Monday”, and write yourself an additional check come cover it. Top top Monday, withdraw the money indigenous the interest account and also cover the check. Pocket the 2 days interest.

It’s referred to as “check-kiting”, somebody has currently thought the it, and it is particularly illegal. Yet not due to the fact that you space writing you yourself a check, i beg your pardon is legitimate.


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Joey_P:

We perform that all the moment at work-related with payroll checks. About fifty percent of them, our employees cash at work-related (out that the register). I might (to conserve what the bank charges united state for depositing and drawing them) no deposit them, however for book keeping, it’s less complicated to deposit them. Then they show up on my continuous monthly declare and, if who should ever before tell that they shed a check and ask because that a brand-new one, ns can display them the cancelled check. Also, now, through cancelled checks gift online, i don’t have to save them anymore, so it is less paper that I have in warehouse at my place.

the Ski Hill organization I assisted out did this too. Casual employees made ~ above the order of $50 come $100 or so every paycheque. Typically, they cashed them at the bar (or the ticket kiosk) prior to going home. Easier for them. For united state - a record that we had actually paid them together required.

My WAG is that any cheque goes through the same process as any other - is there sufficient money come cover the cheque? yes - it is deposited; no, it bounces.

Check-kiting, IIRC, was based on the concept that as soon as you deposited a cheque, if you to be a good customer, they would certainly credit friend the money right away. Riskier customers, they placed a host on the money for a few days till the cheque cleared.

If you began bouncing $500 cheques native A come B to C and ago to A climate you hoped hat somewhere down the road, the banks would shed track that what had and also had no cleared, and it would certainly seem like you had more money 보다 you did. At some point you swoop in and withdraw the $500 number of times from all 3 accounts.


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jtur88:

It’s called “check-kiting”, someone has currently thought that it, and also it is particularly illegal. However not due to the fact that you space writing you yourself a check, i m sorry is legitimate.

It’s illegal since it’s intended come defraud the financial institution by taking benefit of their plan to make funds accessible before a examine clears.

And ns think you will discover in exercise that most financial institutions will hit you up through overdraft dues if you perform what the OP describes. The million dollar check will bounce prior to the funds from the deposit room available.

In many states, the severity of criminal and also civil charges linked with this activity increase with the dollar worth of the examine in question.

Bottom line: carry out not do what the OP describes.


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md2000:

Check-kiting, IIRC, was based upon the theory that once you deposited a cheque, if you were a an excellent customer, they would credit you the money best away. Riskier customers, they placed a organize on the money because that a couple of days till the cheque cleared.

If you began bouncing $500 cheques native A to B to C and back to A climate you hoped hat somewhere down the road, the financial institutions would shed track the what had and had no cleared, and also it would certainly seem choose you had more money 보다 you did. Someday you swoop in and also withdraw that $500 several times from all 3 accounts.

That’s no kiting, that’s simply fraud. Kiting is as soon as you compose a check knowing that you don’t have the money easily accessible right then, but that you will certainly by the time the examine actually clears. Maybe this is a entirety chain of together checks.


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JSexton:

Kiting is as soon as you create a check knowing that you don’t have actually the money accessible right then, yet that you will certainly by the time the check actually clears. Probably this is a whole chain of together checks.

For an example of exactly how this have the right to work top top a truly huge scale, read about the E.F. Hutton examine kiting scandal– they eventually made $8 million by kiting checks.


That’s not kiting, that’s simply fraud. Kiting is when you compose a check knowing that you don’t have actually the money obtainable right then, but that you will by the moment the examine actually clears. Maybe this is a totality chain of such checks.

Interesting. Thanks. I spent the last 40 years under the impression the kiting was once the timing to be intended to develop funds for fraudulent purposes.


Not so rapid md2000. Ns agree with you. Writing a cheque with inadequate funds is vanilla fraud. Kiting is inflating the nominal value in one account through taking benefit of the delay between once funds are posted come the account and also when the cheque clears. This is typically done by creating cheques indigenous multiple account in multiple banks to each various other in a round robin, and then one of two people withdrawing the non- existent money or using the obvious amount together leverage to “prove” wealth.

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Of course intake of the term may vary in various places, yet the over was constantly my understanding.