How Long Does It Take for a Check to Clear?
Gain clarity on check clearing times. Learn what impacts funds availability and when you can expect access to your money.
Understanding how checks move through the banking system and when your money becomes available is important for managing your finances.
Understanding Check Clearing and Funds Availability
Check clearing refers to the process by which a bank verifies the authenticity of a check and ensures sufficient funds are available in the issuer’s account to cover the payment. This involves the movement of the check, or its electronic image, from the bank where it was deposited (the depositary bank) to the bank on which it was drawn (the paying bank).
Funds availability is a distinct concept that dictates when you can actually withdraw or use the money from a deposited check. Even if a check has begun the clearing process, the funds might not be immediately accessible. Banks often place a temporary hold on deposited funds to mitigate risks, such as the check bouncing or being fraudulent. Your bank account balance may show the deposited amount, but the “available balance” reflects what you can actually spend.
Key Factors Influencing Clearing Times
Several factors influence how long it takes for a check to fully clear and for funds to become available. The type of check plays a role: government, cashier’s, and certified checks often clear faster, sometimes within one business day, due to their reliability. Personal checks take longer, around two business days.
The relationship between your bank and the check’s issuing bank also affects the timeline. If the check is drawn on an account at the same financial institution, funds may become available more quickly, sometimes the next business day. If banks are different, interbank communication and verification can extend clearing time. Larger deposits, generally exceeding $5,525, may trigger extended holds due to increased scrutiny for fraud prevention.
How you deposit the check also impacts speed. Deposits made in person at a branch before the bank’s daily cutoff time are processed on the same business day. Mobile deposits or those made at an ATM may have different cutoff times and lead to slightly longer processing. Bank holidays and weekends are not considered business days, so deposits made on or just before these days will experience delays. New accounts or accounts with a history of overdrafts may face longer hold periods as banks assess risk.
Regulatory Timelines for Funds Access
Federal law, the Expedited Funds Availability Act (EFAA), implemented through Regulation CC, establishes maximum timeframes for banks to make deposited funds available. This regulation standardizes hold periods and ensures consumers have timely access to their money. Banks must also disclose their funds availability policies to customers.
Cash deposits and electronic payments, such as direct deposits, are available by the next business day after the banking day of deposit. Certain check deposits, including U.S. Treasury checks, U.S. Postal Service money orders, checks drawn on Federal Reserve Banks or Federal Home Loan Banks, and state or local government checks, require next-day availability. The first $225 of a personal check deposit is available on the first business day following the deposit.
The remaining portion of a personal check is available by the second business day. Exceptions allow banks to extend these hold times under specific circumstances. For instance, deposits over $5,525 may be held longer, with the excess amount potentially available up to the ninth business day following the deposit. New accounts, generally those open for fewer than 30 days, may also experience extended holds on all check deposits. If a bank has reasonable doubt about a check’s collectibility, or if an account has a history of repeated overdrafts, longer holds may be applied.