Saturday, March 26, 2011

File Under Curious

EPJ reader Todd Gibson emails:
This is probably nothing, but seems strange. My brother just went to the bank to withdraw $5000, and they said they didn't have it.  The first teller said people had been withdrawing crazy amounts of cash, then she was interrupted by someone else who said something about spring break and tried to sound like it was no big deal.

6 comments:

  1. Very odd. I bank at a small town bank here in IN. Coincidentally, I tried to withdraw $5000 yesterday afternoon and the bank said they did not have it as well. I was able to withdraw $2,000, however.

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  2. It's fairly common for banks to have very little cash on hand. I've ran into this many times. We can thank fractional reserve banking - they only keep a fraction in reserves to cover outstanding deposits. You don't want to be 2nd or 3rd guy in when the ban runs begin...

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  3. Thats odd. My local family service center CU only allows a max. of $750/day, sometimes less, even $500. But this has been the case for as long as I can remember. My home CU will let me do 5,000 easily.

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  4. Even years ago during the housing boom this was going on. My uncle tried to withdraw several thousand dollars and was told to "come back tomorrow". He had been banking with this bank for the better part of 20 years and still could not get HIS cash. Fractional reserve banking strikes again and again. So... should we organize a massive bank run? No doubt it will be dubbed a form of "domestic financial terrorism". Maybe better to pass haha.

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  5. I am a senior VP at a bank. Small banks and branches can get caught with not enough currency from time to time. For security reasons, it is not prudent to keep too much on hand because of the possibility of robbery, in addition, that extra currency is not earning interest for the bank. I agree that a bank limiting cash withdrawals looks bad. I do believe, however, that this is a reflection of the financial institution, rather than anything else.

    Banks need to be attuned to their customers cash requirements and frequently work with their customers to ensure a seamless supply. An assertive phone call to bank management telling them you'll go down the street can certainly work wonders.

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  6. Will agree with Mike in Alaska. I've gone to the Bank of America branch here in Baltimore city several times to take out amounts in the range of $5000 and they sometimes have it, sometimes not. The bank managers told me it depended on when the armored car made a delivery of cash. She said I could call ahead and they would make sure they had it on hand, but they know the formula for how much cash they typically need and are fine 99% of the time.

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