Why Is There a Check Hold on My Account?
Demystify bank check holds. Understand the common reasons why your deposited funds may be delayed and what to expect from your bank.
When you deposit a check into your bank account, you might expect the funds to be immediately available, but this is not always the case. Banks sometimes implement a “check hold,” which temporarily delays your access to the deposited money. This practice can be unexpected, especially if you need the funds quickly for expenses or other transactions.
Understanding Check Holds
A check hold is a temporary restriction placed by a bank on funds deposited via check, preventing immediate withdrawal or use. Its purpose is to allow the bank time to verify the check’s validity and confirm funds are available from the issuing bank. This process helps mitigate risks like check fraud, insufficient funds, or other irregularities that could lead to financial losses for the bank and account holder. By delaying access, banks ensure the check clears before releasing the money.
Common Reasons for Check Holds
If you have recently opened your bank account, typically within the last 30 days, deposits may be subject to holds because the bank lacks a sufficient history of your account activity. This allows time for the bank to verify your identity and the legitimacy of incoming funds.
Large check amounts can also trigger a hold, as they represent a higher risk to the bank. For instance, deposits exceeding $6,725 in a single day may have the amount over this threshold held for a longer period. If a check has been redeposited after previously being returned unpaid, the bank may place a hold to ensure the funds are now available and to prevent repeated instances of non-sufficient funds.
Your banking history can also influence whether a hold is placed. Accounts with a history of frequent overdrafts, such as having a negative balance on six or more banking days in the most recent six-month period, are more likely to experience holds. Checks originating from outside the local area or from different banks might also be held longer, as they require additional time for verification across different financial institutions.
Checks deposited at an ATM often require manual verification, which can lead to extended hold times. Any indication of suspicious activity, such as an altered check or unusual endorsement, can prompt a hold while the bank investigates potential fraud.
Typical Hold Durations
The duration of a check hold is governed by federal regulations, specifically Regulation CC (Expedited Funds Availability Act). This regulation sets guidelines for how quickly banks must make deposited funds available. For most checks, the first $275 of a deposit must be made available by the next business day after the deposit is made. The remaining funds from checks deposited in person at your bank are available by the second business day.
However, “exception holds” allow banks to extend these periods under specific circumstances. For new accounts, funds might be held for an extended period, sometimes up to nine business days. For large deposits exceeding $6,725, the amount over this threshold can be held for up to seven or nine business days. Redeposited checks, those from repeatedly overdrawn accounts, or checks for which the bank has reasonable cause to doubt collectibility may also be subject to extended holds, up to seven business days. A “business day” refers to weekdays, excluding federal holidays. If a deposit is made on a weekend, it is considered deposited on the next business day, affecting when funds become available.
Bank Procedures During a Hold
When a check hold is placed, the bank verifies the check with the issuing bank. Banks are obligated to provide notice of the hold to the customer. This notification includes the amount of the hold and the specific date when the funds will become available for your use.
The notice may be provided on your deposit receipt, displayed on an ATM screen, or sent via email or mail, depending on how the deposit was made. While the full amount may be held, a portion of the funds, such as the initial $275, is made available sooner. This partial release ensures some immediate access to funds while the remaining amount undergoes the verification process.