How does a check hold work?

A check hold, sometimes called a deposit hold, is a waiting period before you can access funds from a check you've deposited in your bank account . In most cases, the full amount of your deposit will be available two business days after you deposit a check.

What is the limit for a check hold?

The Federal Reserve has set baseline rules for check deposits: The first $225 must be available the next business day, while amounts from $226 to $5,525 must be available within two business days after the deposit, and amounts of over $5,525 generally should be accessible on the seventh business day.

What does it mean for a check to be on hold?

When you deposit a check, the money isn't always available right away. The amount of time that it takes for your funds to become available is sometimes referred to as a check hold. It means the bank is holding the money and you can't spend it yet . Not all banks and credit unions use the same check hold period.

Why is my check on hold for so long?

Banks place holds on checks for a number of reasons, and it doesn't mean the deposit won't ever go through. Banks often hold large deposits to ensure the payor has sufficient funds in their account, to prevent fraud, or to verify the check's authenticity .

Can a bank override a check hold?

The funds-availability date on the receipt can tell you when it may be time to contact the bank regarding hold inquiries. If you don't receive a receipt, however, consider contacting your bank. Sometimes, a bank can override the hold for you .

How long does a check hold usually last?

Fortunately, Federal Reserve regulations limit how long a financial institution can hold a check before releasing the funds to the account owner. In most cases, checks are held for less than a week .

Can you speed up a hold on a check?

Your bank might be willing to speed things up, especially if you don't have a history of bouncing checks or making bad deposits . In many cases, you won't be able to do anything about a hold.

Can I cancel a check on hold?

In general, stopping payment on a check is possible at any time before the check is cashed . Once the check has been cashed by its recipient, the person who wrote or authorized the check won't be able to make a stop payment with their bank.

What is the longest a bank can hold a check?

According to banking regulations, reasonable periods of time include an extension of up to five business days for most checks. Under certain circ*mstances, the bank may be able to impose a longer hold if it can establish that the longer hold is reasonable.

Can I ask my bank to release funds early?

Some banks or credit unions may make funds available more quickly than the law requires, and some may expedite funds availability for a fee. If you need the money from a particular check, you can ask the teller when the funds will become available.

How long can you hold a check from work?

In California, an employer is required to pay a final paycheck on an employee's last day of work or within 72 hours of that last shift . This final payment shall include all accrued and unused vacation time and any paid time off.

How do you get rid of a hold on a check?

You can ask your bank to remove a check hold , but that doesn't guarantee the bank will comply. If the bank has reason to believe that the check may be fraudulent or that the check writer lacks sufficient funds to cover it, the hold may remain in place for the full window that's allowed by law.

Check Hold: Definition, How It Works, Types, and Time Limits (2024)

What Is a Check Hold?

A check hold is the maximum number of days that a bank can legally hold the money from a check that's been deposited. The bank must credit the funds to the account of the party making the deposit after the check hold period has expired.

The check holding period is generally equal to the number of days it takes for the check to go through the bank's clearing cycle.

Key Takeaways

The Federal Reserverequires that a bank hold most checks for a reasonable period of time before crediting the customer’s account.
A "reasonable" period of time can range from two business days to up to six business days.
A hold can also be placed if a bank has reasonable cause to doubt the collectability of the check.
The portion of a deposited check that exceeds $5,525 can be held for two to five business days.

How Check Holds Work

The Expedited Funds Availability Act of 1987 (EFAA) mandated that local checks may be held for no longer than two business days. All checks in the United States were considered to be local after 2010. The two-day hold has been extended to five days as a reasonable limit for holding some checks.

The Federal Reserverequires that a bank hold most checks before crediting the customer’s account for no longer than a “reasonable period of time.” This is accepted as two business days for a same-bank check and up to six business days for one that's drawn on another bank. Financial institutions may hold on-us items for one business day following the deposit.

Many use the term EFAA Regulation interchangeably with (Reg) CC.

Banks may decide to place six types of holds on checks:

Any amount that exceeds a $5,525 deposit can be held. This “remainder” must be made available within a reasonable time, usually two to five business days. Such deposits are considered large deposits.
Checks that are redeposited may be held for a reasonable period of time, but the bank may not hold the check as being redeposited after it has corrected the deficiency if a customer returns the check due to a missing endorsem*nt or because the check was postdated.
Banks can hold checks from funds that are repeatedly overdrawn. An account is considered to be repeatedly overdrawn if it's had a negative balance on six or more banking days during the most recent six-month period,or if the account balance was negative by $5,000 or more two times in the most recent six-month period.
A hold can be placed if a bank has reasonable cause to doubt the collectability of the check. This is referred to as "doubtful collectability." It can occur with postdated checks, checks that are dated six months prior or more, and checks that the paying institution has deemed it won't honor. Banks must provide notice to customers of doubtful collectability, including the specific reason.

A bank may hold checks that are deposited during emergency conditions such as natural disasters or communications malfunctions. These could prohibit the bank from functioning with its normal processes. A bank can hold such checks until conditions permit them to provide the available funds.
Banks may hold deposits that are made into the accounts of new customers, defined as those who have held open accounts for less than 30 days. Banks can choose an availability schedule for new customers.

What Is Check 21?

Check 21 is theCheck Clearing for the 21st Century Act. Congress passed it in 2003 to accommodate checks that are processed electronically and to expedite the holding periods for these transactions.

What If My Bank Won't Tell Me How Long It Will Hold a Check I've Deposited?

Regulation CC provides that banks must post their availability policies on their premises at a location where customers who are making deposits are likely to see it.

Can Avoid Having Money Held When I Make a Deposit?

Banks can't hold cash or electronic payments, direct deposits, money orders, cashier’s checks, certified checks, teller’s checks, or state or local government checks. They also can't hold the first $5,525 of traditional checks that aren't in question because they're next-day items. Ask anyone who's paying you to use an alternate means of payment rather than a traditional check if you have concerns and want to ensure that you have access to the money right away.

The Bottom Line

Banks are permitted by law to hold the money for a period of time when they accept a check for deposit. The exact amount of time is determined by various factors, but it's typically based on how long it will take the deposit to move through the bank's clearing cycle.

It’s imperative that you understand when the money will be available to you if you deposit a check, particularly a large one. Commercial banks are obligated to disclose their hold policies to all account holders. The bank must provide its policy in written form if you ask for it.