Bankhackery: Open an Account at Every Bank

This is definitely one of those tricks that seems so obvious that there must be a reason few people do it. And there is: It’s a pain in the ass. But when you’re a small business owner who takes a lot of personal checks (and are a stellar record keeper), it’s a pretty great idea.

For many years, I have done computer consulting on the side for various businesses and the dreaded Home User. I’ve since dropped just about all of my home users as I don’t have the time and generally they are a royal pain in the ass.

So what did reader Michael Honda do? He opened up an account at every bank he could. Then when his customers wrote him a personal check, he didn’t have to worry about it bouncing. Instead, he’d take it directly to the customer’s bank—now his bank, too—and cash it.

Michael’s whole story after the jump.

However, one lesson I learned from my home users is a simple trick I used to make sure I didn’t get screwed by my deadbeat customers. Pretty much every time services were rendered for a customer, I would receive payment in the form of a personal check. On several occasions, these checks were floating until payday, by request of the customer. (Not a good business practice, but you do what you have to do to get paid.) Sometimes even intentionally bad. On one such occasion involving a very large sum of money, the bad check written by my customer resulted in a few NSF fees on my end from the always lovely Bank of America.

From that point on, I decided that I would take checks written to me directly to the bank from which they were written and trade them for cash at the teller. Here lies the issue. If you don’t have an account at said bank, you get the shaft. At most banks as a non-account holder, you can not cash a check through the drive-up teller. They require you to come inside during business hours, which was almost impossible for me as I held a 9-5 in addition to my side work. When you do go inside, you get to stand in the non-account holder line which is generally only attended to when all the paying customers are taken care of. You also have to provide multiple forms of identification, your fingerprint and sometimes even fill out an information card. The good thing is that you can trade this check for cash in hand and ensure that you’re not getting screwed by the shady customer.

The way I got around the non-customer inconvenience is this: I went to every single one of my customers’ banks and opened an account. You have to make sure that you open a checking account with no fees, no penalties for inactivity and most importantly no minimum balance. Generally, banks require that you open these sorts of accounts with $50-$100 bucks, but of course you can withdraw any excess the second you get your ATM/Debit card. After you have an account, use of the drive-up teller for your business has no hassle, no long lines at the teller inside, the ATMs are available around town. Most importantly, if your shit-brained customer writes you a bad check, it doesn’t impact your personal bank account. You know immediately if it’s not good—their bank will tell you that there are no funds in the account and that you can’t cash the check, and you can break knees accordingly.

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  1. Mike Panic says:

    It makes sense, sort of, however working for a small business a few years ago, it was easier to just say no to checks and pay the credit card processing fees.

  2. Rob Kohr says:

    One way would be to do it as you need it instead of all at once. You get a check from bank X, go to that bank and open up an account using that as your initial deposit. You get one from Y, go to Y. This way you don’t have more banks then you need.

    Another thing to think about is payoff/reward. Perhaps one customer pays from bank Z. You could wait till 2 or three customers also give you checks from bank Z before opening an account there.

    It really depends on when the cost to go to other banks is less then the cost/risk of bad checks.