You have 60 days to deposit the money into your IRA. Make sure you tell them it is a rollover and not a contribution. (This is critical.)
If the withdrawal was $500 and you got a check for $450, then either:
a. deposit $500 as a rollover, it doesn't matter where you get the extra money from. It will count as a rollover. The $50 withholding will come back to you in your tax refund.
b. if you deposit the net $450 as a rollover, then $50 will count as a taxable withdrawal, subject to income tax plus a 10% penalty. The $50 withholding goes to your credit on your tax return along with other tax withholding and will come back as a refund if you have more withholding than you owe.
If you miss the 60 day window, the withdrawal will be fully taxable. If the IRA codes it as a contribution instead of a rollover, the withdrawal will be taxable, but might be offset by the contribution. But if you already maxed your contributions, then you will have an excess contribution and penalty situation. So make sure it goes in as a rollover.
I don't know why your bank discouraged you from doing a rollover, maybe they misunderstood what you wanted to do. You could open another IRA at a different bank, if necessary.
