Why would a bank hold a check for 10 days?

Share:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Reddit (Opens in new window)Editorial Note: Credit Karma rece

Why would a bank hold a check for 10 days?

Share:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on Reddit (Opens in new window)Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesnt affect our editors opinions. Our third-party advertisers dont review, approve or endorse our editorial content. Its accurate to the best of our knowledge when posted.Advertiser Disclosure

Advertiser DisclosureClose

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

If youve ever deposited a check in your bank account, you probably noticed it can take some time before the funds are available for you to use.

Banks commonly put a hold on newly deposited checks, restricting availability of the money for a time. If you need the money right away, a check hold can be a frustrating experience.

But theres good news. Federal law limits the maximum amount of time financial institutions can hold funds  usually no more than two business days. And a check hold can protect you in case the deposited check bounces or youve been a victim of check fraud.

Lets look at what a check hold is, how long it can last, and why a bank restricts the available funds in the first place.Dont wait until payday to get paid Open an Account Now


  • What is a check hold?
  • How long will the check hold last?
  • Why might a bank put my check on hold?
  • How will I know if a check is on hold?
  • What should I do about a check on hold?

What is a check hold?

When you deposit a check, the money isnt always available right away. The amount of time that it takes for your funds to become available is sometimes referred to as a check hold. It means the bank is holding the money and you cant spend it yet.

Not all banks and credit unions use the same check hold period. The maximum deposit hold period was established by the federal Expedited Funds Availability Act, and your bank or credit union generally cant hold deposit funds past that period. But there is no minimum hold period. Your bank decides whether it will release the funds to you faster than the maximum hold period.

How long will the check hold last?

The financial institution will decide how long to keep your check on hold based on the size of the check, who the check is coming from and your account history. Your banks account agreement should explain when you can expect funds to be released under certain situations.

Generally, funds from deposited checks can be available the next business day if

  • The check is for less than $200.
  • Its a certified check, drawn on another account at your financial institution, or a government check.
  • You made the deposit in person at your bank with the help of a bank employee.

Funds will generally be available on the second business day if

  • The check is for more than $200 (although you can get $200 of the amount on the first business day and the remaining funds when the hold ends).
  • You make the deposit at an ATM at your bank.
  • You make the deposit after the financial institutions cut-off time for the day.

Its possible for a bank to hold a check longer than two business days  the law allows banks to do so in certain circumstances. But the law also says the extended hold should be for a reasonable period of time  generally between two and seven business days.

Your bank can keep the check on hold longer, but it must prove that the amount of time is reasonable. And it must tell you when you make the deposit (or within one business day if you dont make the deposit in person) that the hold will be longer, why its holding the funds and when the money will be available to you.

Just because your check is on hold, it doesnt necessarily mean theres anything wrong. The bank is just taking some additional time to ensure the funds clear before it gives you the OK to use them. Once the hold is over and your check has cleared, youll be free to use the money

What does business day mean?

By now, youve probably noticed weve been talking about business days rather than calendar days. A business day is generally considered 9 a.m. to 5 p.m. local time on weekdays (excluding federal holidays), not weekends.

That means if you deposit a $100 check in your bank account at 11 a.m. on Friday, and that check is drawn on an account at the same bank, the next day your deposit could be available would be Monday (a business day)  not Saturday or Sunday.

Why might a bank put my check on hold?

While it can be annoying to have your funds put on hold, banks hold checks for a reason: to ensure the funds clear before you spend them. Without a hold, you might end up spending money you think you have  only to find out that the check hasnt cleared, causing you to overdraw your account and rack up hefty overdraft fees.

Hold policies vary from bank to bank, but there are some common reasons your check might be subject to a longer delay.

  • Youve recently opened the account.
  • Your checking account has been overdrawn too much in the past six months.
  • The deposit being made is more than $5,000.
  • You make the deposit at an ATM that isnt owned by your bank or credit union.
  • Your bank believes that the check will be uncollectible.
  • The check has been redeposited because it was first returned unpaid.

Banks put checks on hold to protect you from honest banking mistakes  and from check scams that can cheat people out of their money.

One common scam works like this: Someone gives you a fake check for more than youre owed (for example, someone buys something from you online and sends you a check for too much money). Then the scammer asks you to send back the overpayment amount. The scammers checks can look just like real checks, and it can take weeks for banks to detect the fraud. While the check is on hold, the scammer hopes youll send a real check for the overpayment amount before you realize their check was fake.

A check hold is one way the banks try to combat such scams.Dont wait until payday to get paid Open an Account Now

How will I know if a check is on hold?

Banks have different policies for when to issue holds and for how long. If and how youre notified of a hold will also vary by bank. But your bank is required to give you disclosures that detail its check-hold policy and how long a check can be on hold.

If you deposit your check at a bank, your teller should be able to tell you how long the check hold will last and when your funds will be available. After depositing, some banks will issue you a deposit receipt that will include info about the hold and when you can expect the funds to be available.

What should I do about a check on hold?

Theres not much you can do while waiting out a check hold. Your bank will do the work and the funds will be available to you when the check clears. But if youre concerned about when that will happen, you can contact your bank to see how long it could take for the funds to become available.

Check holds occur often and are out of your control for the most part. But if you keep your account in good standing, you can limit the hold time to only whats necessary. A bank may hold your checks for additional days if your account has been repeatedly overdrawn. So be sure to monitor your account closely and avoid spending more than your available balance.


Next steps: Tips to make deposits go smoothly

Here are some things you can do that may help your deposit clear as quickly as possible.

  • Properly endorse the check.
  • Make deposits in person at your bank and be prepared with your ID in case a teller requests it.
  • If you make the deposit through an ATM, use one owned by your bank. An ATM deposit could take longer to clear if made through a device your financial institution doesnt own.
  • If youre making a mobile deposit, take a clear picture of the check (use a well-lit location and a dark background for contrast, and be sure all four corners of the check are visible in the frame).
  • Be alert to clues that a check you received may be fake. For example, if the postmark on the envelope doesnt match the city and state of the bank the check is supposedly drawn on, it could be a fake check. And if you receive a check for more than the transaction amount, dont agree to refund the overpayment portion  thats a common check scam.
  • Have your paycheck deposited directly into your bank account. Electronic deposits can often be available on the same business day.

In some cases, it may make sense to ask for payment in cash rather than a personal check or business check. Cash deposits are typically available on the day of deposit.Dont wait until payday to get paid Open an Account Now


About the author: Erica Gellerman is a personal finance writer with an MBA in marketing and strategy from Duke University. Shes also the founder of The Worth Project: a weekly money newsletter you actually want to read. Her work has b Read more.

Read More

Piggy bank with calculator

Image: Piggy bank with calculator

6 common types of bank accounts

Stressed young woman using a computer at her work desk

Image: Stressed young woman using a computer at her work desk

What is an overdraft fee?

Young woman staring at phone and looking worried

Image: Young woman staring at phone and looking worried

How to avoid overdraft fees

Man standing on a bus, smiling and reading on his smartphone about no-fee banking

Image: Man standing on a bus, smiling and reading on his smartphone about no-fee banking

Is truly no-fee banking possible?

Smiling woman in a lawnchair, cashing a check online using her mobile phone.

Image: Smiling woman in a lawnchair, cashing a check online using her mobile phone.

How to cash a check online

Young woman with a laptop on her knee, sitting on some steps and wondering if she can open a bank account online

Image: Young woman with a laptop on her knee, sitting on some steps and wondering if she can open a bank account online

Can I open a bank account online?

Video liên quan