How Long Will a Bank Hold a Check?

When you deposit a check, your bank places a temporary hold on the funds. This practice allows financial institutions to verify the check and ensure the funds are collectible before making them fully available for withdrawal. Understanding these hold periods is important for managing your finances, as the duration can vary based on several factors.

Understanding Check Holds

A check hold is the period a bank waits before making deposited funds fully available to the account holder. This practice serves several purposes for financial institutions, primarily to prevent fraud and manage risk. Banks use this time to ensure the check clears the issuing bank and that the funds are indeed available from the payer’s account. This process helps protect both the bank and the depositor from potential losses due to insufficient funds or fraudulent checks.

These banking practices are subject to federal oversight, largely governed by the Expedited Funds Availability Act, commonly known as Regulation CC. This regulation sets the framework for how quickly banks must make deposited funds available to their customers. It aims to balance the need for timely access to funds with the bank’s requirement to mitigate risks associated with check processing.

Standard Check Hold Periods

Regulation CC outlines the standard timeframes within which banks must make deposited funds available. A portion of a deposited check, the first $225, must be made available by the next business day after the deposit. This minimum availability amount is set to increase to $275 effective July 1, 2025.

For most checks, including those drawn on other banks, funds become available within two business days after the deposit date. Checks deposited at an ATM not owned by your bank might have a longer hold, up to five business days. Some types of checks, due to their inherent security, have faster availability, by the next business day. These include U.S. Treasury checks, U.S. Postal Service money orders, federal, state, and local government checks, as well as cashier’s checks and certified checks, especially when deposited in person to a bank employee.

Circumstances Leading to Extended Holds

While standard hold periods apply to most deposits, banks can extend these times under specific circumstances outlined in Regulation CC. One common reason for an extended hold is deposits made into new accounts, defined as those opened for less than 30 days. For these accounts, next-day availability applies only to cash and electronic payments, and the initial $6,725 of certain check types like government or cashier’s checks. The remaining portion of such deposits may be held for a longer period, up to nine business days.

Extended holds can also occur with large deposits, specifically when the total amount of checks deposited on a single banking day exceeds a certain threshold, currently $6,725. The bank may hold the amount exceeding this threshold for an additional two to five business days. Checks that have been returned unpaid and are then re-deposited may also be subject to extended holds, as this indicates a previous issue with fund availability.

Banks can impose longer holds on accounts with a history of frequent overdrafts. If a bank has reasonable cause to doubt the collectibility of a check, such as suspicion of fraud, an altered check, or a post-dated check, an extended hold is also permissible. During emergency conditions like natural disasters or system malfunctions, banks may temporarily extend hold periods until normal operations can resume.

Accessing Funds and Addressing Concerns

Even when a hold is placed on a check, customers have immediate access to a portion of the deposited funds, the first $225 or $275, depending on current regulations. This initial amount is made available by the next business day.

Financial institutions are required to notify customers when a hold is placed on a deposit. This notice should specify the amount of the hold, the reason for it, and the date when the full funds will become available. This notification can be provided at the time of deposit, on the receipt, or through other channels like email or mail.

To effectively manage check holds, customers can proactively inquire about their bank’s specific funds availability policies. It is advisable to review the deposit account agreement documents provided by your bank to understand their standard procedures. If you receive a hold notice and believe it is unjustified, contacting your bank directly to clarify the situation is a prudent step. For faster access to funds and to avoid check holds altogether, consider using alternatives to paper checks. Electronic payment methods such as direct deposit, wire transfers, and various digital payment platforms like P2P apps offer quicker, immediate fund availability.