I have direct payroll deposit with my bank. For years I have written a check two days ahead of my direct deposit, with the understanding that it took two days for a check to clear, since the store to whom I wrote the check must first deposit it into their bank, which would then send it to mine. In other words, I thought it was a policy with paper checks that there was a two day floating time. Why after ten years did a check which I wrote at the same store for ten years suddenly hit my bank in one day?
Chalk it up to the efficiencies of the banking system finally catching up with a risky practice. Most checks today are captured in an image format or converted into electronic form. The check images or electronic checks can be routed electronically rather than physically, so that transportation delays can be eliminated from the system. Some businesses can even deposit checks they accept without ever taking them to the bank.
Making check collection more efficient can theoretically make it possible for your check to be given to the store at three in the afternoon and get presented for payment at your bank the same business day. While it's never been a great idea to plan on float time to write checks before funds are in your account, the practice is now becoming much more likely to result in an overdraft, and cost you money.
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Chalk it up to the efficiencies of the banking system finally catching up with a risky practice. Most checks today are captured in an image format or converted into electronic form. The check images or electronic checks can be routed electronically rather than physically, so that transportation delays can be eliminated from the system. Some businesses can even deposit checks they accept without ever taking them to the bank.