Man who wants to withdraw $600,000 in cash is forced to wait — for weeks: Money Matters

Cleveland.com

Q: I am a customer of Dollar Bank and, in early February, I asked to withdraw $600,000 in cash from a branch on the East Side. They said they needed more notice to give me that much cash.

I decided to withdraw my money because Dollar Bank notified me that they were going to cut my interest rate from 1 percent to 0.25 percent on any amount over $100,000.

I kept going back to the branch or calling every week and they couldn’t tell me when I could get my money, or why I couldn’t get it right away.  

I’m in my 70s. I’m very stressed about this. I just want my money.

— Initials and city withheld

A: Right about the same time that you contacted me, you finally got your $600,000 in cash. But you said they never gave you an explanation about the delay.

My first question to you was: Why in the world did you want to withdraw $600,000 in cash? Why not get a cashier’s check?

You said you had no plans to deposit the money anywhere else. I can’t imagine where you would safely keep $600,000. I know your homeowner’s insurance won’t cover it if something happens to it at your home. I personally would be worried about having $6,000 in cash at my house, much less more than a half-million dollars.

But, it is certainly your right to withdraw your money in cash. I have heard of bank branches requiring 24 hours’ notice to make a large cash withdrawal because most branches don’t keep humongous amounts of money on hand. Seven weeks does seem like a bit much.

At least you were able to get the extra month’s interest at 1 percent. The new rate, as it turns out, is 1.0 percent on amounts up to $100,000, 0.5 percent on amounts more than $100,000 and 0.25 percent on amounts more than $250,000.

Dollar Bank spokeswoman Lisa King said the bank can require 14 days’ notice for a large withdrawal. But a request like yours raises some serious questions. First, the bank was trying to determine whether you were the victim of a fraud scheme.

“Elderly customers are often taken advantage of by people/organizations seeking to defraud them of their money,” King said.

Second, the bank was concerned whether it was “safe and prudent” to give $600,000 cash to anyone.

“We were concerned not only about our customer’s safety, but also the safety of our branch employees and other customers. How many people knew this gentleman had requested this much cash?” King asked.

The bank did try to provide you with withdrawal options that would be safe and in your best interests, King said. You apparently didn’t want any of that.

King did say the bank did a thorough review of how employees handled the transaction, and said it acted within the timeframes details in its deposit agreement.

She adds that the bank, for your safety, had two bank security officers on hand the day you were told you could get your money, and hired two Mayfield Heights police officers to escort you to your car.

I hope your daughter – who I also talked with – or another relative who knows about this is able to lead you to rethink your mattress strategy. And to be honest, you should have that amount of money spread out at two or three banks, because of Federal Deposit Insurance Corp. limits. But one bank is better than none.

Q: As you know, iBonds are a great deal because of the fixed rate and inflation protection. The last time I bought them, in 2003, I did so in April and got the interest for the full six-month period from November to April. Is that still the case?

I’m asking you because it’s impossible to get in touch with the Treasury Department about iBonds. They do not respond to emails and the phone lines are busy and the voice mail is full.

— W.G., Northfield

A: Yes.

The rates (both fixed and inflation) are announced each May and November and apply to all bonds issued during the six-month period starting with the announcement date.

Note that if you redeem the I Bonds before they’re five years old, you’ll have to forfeit the three most recent months of interest.

For more information, go to: http://tinyurl.com/ibondsindepth

Q: Your advice on personal checking accounts last week was beyond ludicrous. Why would you have a second account for checks written to people you don’t know well? Why not open a separate account for each check you write? You’d probably sleep even better.

I’ve practiced business and estate planning law for 37 years but have only one personal checking account. This issue does not keep me awake at night. I review my bank statement monthly and I know I’m not liable for forged checks.

— S.D., Cleveland

A: Opening a separate account for each check would be a bit ludicrous. And it would probably flag someone under the Patriot Act. A second account is reasonable and manageable.

Of course people aren’t liable for fraudulent transactions. But I don’t want to put my primary checking account – where my direct deposits are made and where my bills are paid – at additional risk by exposing the routing number and account number to individuals I don’t know. Am I being extra-cautious? Perhaps.

I’m sure this is the reason you don’t hand out pieces of paper with your credit card number and CIV code and expiration date. If it’s misused, you’re not liable. But it sure would be a headache to clean up the fraud.

http://www.cleveland.com/business/index.ssf/2012/04/man_who_wants_to_withdraw_6000.html