When you deposit a check or receive a direct deposit in your bank account, you may expect the money to be accessible immediately, but that may not always be the case.
There are a variety of reasons why it may take several days for new funds to become available to withdraw or spend. Learn how deposits are processed and why delays occur to avoid accidentally overdrawing your bank account when a deposit is still pending.
Funds-Availability Regulations
When you make a deposit, your bank will often make the funds available for withdrawal immediately. However, your deposit may temporarily be held according to the standard hold periods established under the Expedited Funds Availability Act.
These hold periods vary by deposit type and amount. In general, banks must make the funds from your deposit available for withdrawal no later than the next business day after the day when the bank received the money for the following deposits:
- Deposited checks up to $225
- Cash deposits made in person
- Wire transfers
- Electronic payments (e.g., direct deposits like your paycheck)
- Official government checks of up to $5,000 in value
- Other ACH credit transfers
Note
Many banks make electronic payroll deposits available for withdrawal immediately.
Keep in mind that for non-cash deposits, the funds availability date is different from the date when the payment clears. The payment clears when the payee's bank has successfully collected the funds from the payor's bank.
For a check to clear, for example, your bank must send the paper or electronic check to a regional clearinghouse, after which it will go to the check writer’s bank for payment.
If the check is good, the paying bank will send the payment, and the check will clear. If not, the bank will return the check as unpaid, and your bank will debit your account for the amount of the bad check.
The clearing process can take approximately 10 days. While the deposit is still pending, you're technically spending on credit.
Banks are required to communicate hold periods to customers in writing, so take the time to review your account agreement for details on the holds that apply to your deposits. This information is often found on your bank's customer service webpage.
Exception Holds on Deposits
Another reason your check or cash deposit may not be showing up as planned is that the bank put an exception hold on the funds, which allows it to hold the deposit for a period that is longer than the standard hold periods established under the law.
Exceptions to the next-day funds availability standard apply to certain types of deposits:
- Redeposited checks or checks that you deposit to new accounts or repeatedly overdrawn accounts
- Deposits of $5,000 or more
- Deposits that the bank suspects it can't collect on
- Deposits made under certain unusual conditions
Note
Unusual conditions might include a system malfunction at a bank, for example, or cash deposits not made at a teller.
When exception holds apply, the bank can extend the standing hold period by what it deems to be a "reasonable" time frame, which it will state in the account agreement. But in general, your funds availability date will be delayed by:
- Up to five extra days for most checks
- Up to eight extra days for checks over $5,000
- One extra day for "on-us" checks (those deposited in and drawn from the same bank)
- One extra day for cash deposits not made at a teller
- Up to six extra days for deposits at an ATM not owned by your bank
The reason for these delays is that these deposits are considered by banks to be risky. For example, the larger a check's value, the more risk the bank would take on if it were to give you immediate access to the funds in their entirety.
However, banks still generally guarantee next-day availability for the first $200 of a large check and often make it available at the time of deposit.
Business Day Cutoff
For next-day funds availability, banks consider the next day to be the next business day. However, most banks establish a cutoff for what constitutes the end of the business day, after which they switch over to the following business day to determine your funds availability date.
The cutoff for the business day is generally:
- No earlier than 2 p.m. for deposits at the bank
- No earlier than noon for off-site deposits (such as an ATM)
One reason banks do this is so that they can send the majority of the day’s work to the processing center so that everything can be handled by midnight. This can also apply to checks.
When you deposit a check and the receipt says "next business day" or the date on the receipt is for the next day, it means that although the paying bank received the money, the check will not be debited from the payor's account until the next business day.
If a bank has already crossed over to the next business day, it will print this information on your deposit receipt. You can also ask the teller who handles your deposit whether it is considered the next business day and when the money will be available.
Some banks will switch over the ATMs first, so you may be able to complete a transaction on the same business day by going inside. They may also have one teller who switches over after others, so it doesn’t hurt to ask if someone is still on the same business day if you need the money more quickly.
Bank Mix-Ups
Occasionally, your deposit may not show up as planned because of a mix-up with the bank.
You can look out for this by monitoring your account daily. When you deposit into your account, it should show up in your account history, even if the funds are not immediately available to you.
Occasionally, a deposit may accidentally post to the wrong amount, or in rare cases, to someone else's account. When that happens, you will see an incorrect record of the deposit—or no record at all—when you access your account online.
Note
If there is an error, you can provide proof of your deposit by keeping your deposit receipt until the funds clear or obtaining a copy of the front and back of the check from the payor.
If you notice a problem with a deposit, contact the bank immediately and find out what happened to fix the issue. Your account agreement will inform you of how long you have to notify the bank about errors. In many cases, you will have 30 days from the statement date to alert the bank to a discrepancy in your account.
Frequently Asked Questions (FAQs)
If a deposit is pending, can I use the money?
You probably can't use the money from a pending deposit unless your bank gives you a line of credit. Some banks may have special policies or loan products that give you some flexibility to spend money while waiting for direct deposits, but consumers aren't guaranteed those options, and there may be fees associated with those kinds of services.
How long does a pending direct deposit take to post?
In most cases, a pending direct deposit is posted within one business day. For example, if a direct deposit starts pending on Wednesday, you should be able to use the funds by Thursday (assuming there aren't any bank holidays).
