How Long Are Holds on Checks? Standard & Extended Times
Get clear answers on how long banks hold deposited checks and what determines when your funds are fully accessible.
A check hold refers to the period a financial institution delays making funds from a deposited check fully available for withdrawal. Banks implement these holds primarily for risk management, allowing time for the check to clear and ensuring funds are genuinely available from the issuing bank.
Standard Check Hold Durations
Federal regulations, specifically the Expedited Funds Availability Act implemented through Regulation CC, dictate the maximum permissible hold periods for checks. The first $275 of a deposit is typically available for withdrawal by the next business day after the deposit is made.
The remaining amount of the check deposit is usually available by the second business day. For instance, if a check is deposited on a Monday, the first $275 would be accessible on Tuesday, with the full amount available by Wednesday. Regulation CC no longer distinguishes “nonlocal” checks, simplifying the general rule to next-day or second-day availability. Funds deposited at an ATM not owned by the bank may have a slightly longer standard hold, typically up to the fifth business day.
Situations Leading to Extended Holds
Financial institutions are permitted to extend check holds beyond the standard periods under specific circumstances, acting as safeguards against potential losses. One such situation involves new accounts, generally those opened for less than 30 days. During this initial period, banks may hold funds for a longer duration, as the account history is not yet established.
Another common reason for an extended hold is a large deposit. If the aggregate amount of checks deposited in a single banking day exceeds $6,725, the amount over this threshold may be subject to an extended hold. Banks can also extend holds on accounts that have been repeatedly overdrawn.
Additionally, if a check has been re-deposited after being returned unpaid, an extended hold may be placed to allow the bank to assess the risk. Banks can also place holds if they have reasonable cause to doubt the collectibility of the check, such as suspected fraud or if the check is post-dated. In rare instances, emergency conditions like natural disasters or system failures can also lead to extended holds. For these exceptions, the extended hold period is generally considered reasonable if it does not exceed five additional business days for most checks, or one additional business day for “on-us” checks (drawn on the same bank).
Checks with Faster Availability
Certain types of checks are considered to carry lower risk and are therefore typically subject to faster availability rules, often allowing funds to be accessible on the next business day. These include U.S. Treasury checks, which are backed by the federal government and are generally available quickly. U.S. Postal Service money orders also fall into this category, as do cashier’s checks and certified checks.
Cashier’s checks are drawn on the bank’s own funds, meaning the bank guarantees payment, and certified checks involve the bank verifying and setting aside funds from the payer’s account. State and local government checks also frequently qualify for expedited availability. The inherent guarantee or backing by a governmental entity or the financial institution itself reduces the risk of these checks being returned unpaid, enabling quicker access to funds for the recipient.
Bank Communication and Your Rights
When a financial institution places a hold on a deposited check, federal regulations require them to provide specific notification to the customer. This notification must generally be in writing and should clearly state the reason for the hold. The notice must also specify when the funds will become available for withdrawal.
If the deposit is made in person to a bank employee, the notice is typically provided at the time of the deposit. However, if the deposit is made through an ATM or by mail, or if the decision to place a hold occurs after the deposit, the bank must mail or deliver the notice no later than the first business day following the deposit. Customers have the right to inquire about any hold placed on their funds, and the bank is obligated to provide a clear explanation for the delay. Financial institutions are also required to disclose their general funds availability policies to customers upon account opening.