Accepting Cheques and Deposits with RBC
Look here for answers to the many of the questions you might have about cheques that are placed “on hold.” We also provide tips to give you peace-of-mind when you accept a cheque as payment or reimbursem*nt for purchases. Please Note: “Cheque” also includes certified cheques, bank drafts, money orders and other instruments.
Our Hold Policy follows the regulations set out in the Bank Act. The cheque clearing system for the financial services industry is guided by rules established by the Canadian Payments Association (CPA).
Cheque Hold Periods
For more information and timelines for hold periods, check out the Hold Policy Guide.
Hold Policy Guide (opens PDF in new window)
Who is Responsible for the Cheque or Deposit?
Individuals and businesses are ultimately responsible for the items they deposit into their bank accounts. Generally a cheque can clear but only be considered validated when money is taken out of the account of the person who wrote the cheque and the intended recipient has received the funds in their account.
Our Hold Policy is explained in, and is subject to, your account agreement. For example, if a cheque you deposit is returned to RBC for any reason, either during or after the expiry of the applicable hold period, RBC has the right to charge the amount of the cheque/item to your account. Holds are placed on some deposited items to protect both clients and the Bank from fraud.
Tips and Questions to Consider
Cheques can be returned for a variety of reasons in a variety of time frames based on the CPA rules. You are financially responsible for items deposited or cashed both before and after the cheque hold period.
Therefore, when accepting cheque/items for deposit to your account:
- Do you know the person that signed and gave you this cheque/item?
- Do you normally receive cheques from this person?
- If so, have you ever had any problems with these items?
- Have they ever been returned to you/your account because it was unpaid?
- Is this a "one-time only" transaction, or do you regularly deal with this person?
- Is the cheque/item for an amount more than you expected, or are entitled to?
- Were you approached to make this deposit on behalf of someone else?
- Were you promised a portion of the proceeds to deposit this for someone else?
- Were you asked to send a wire payment to a third party that you do not know?
- Does this transaction, or the person you are dealing with, make you feel uncomfortable?
Frequently Asked Questions
Placing holds on cheques is not new. A financial institution must protect its depositors and shareholders from losses due to the negotiation of bad cheques. When a cheque is deposited, the financial institution will generally hold the item until it can verify that sufficient funds are available in the account at the other financial institution. However, this does not guarantee that the item will not be returned at a later date for some other reason. Below is a link to the Canadian Payments Association website for additional factors considered when placing holds.
Yes, although there is always a risk associated with the subsequent return of the item deposited/cashed. Cheques written to you by people you know and trust are generally safe.
If you are concerned with the cheque/negotiable item provided or you are unfamiliar with the sender, please contact your local RBC Royal Bank branch or call 1-800-769-2511 1-800-769-2511 for personal clients or 1-800-769-2520 1-800-769-2520 for business clients.
Additional steps/measures can be taken to minimize the risk of your item being returned.
A financial institution's decision whether or not to place a hold on funds is a business decision. However, if a financial institution decides to place a hold on funds, it will generally hold an item for the number of days likely required for the item to reach the branch/financial institution that holds the account on which it was written and, to determine if there are sufficient funds in that account. For more detailed information regarding industry standards on Cheques and Holds on Cheques visit the Canadian Payments Association website below.
Yes. Once the hold is lifted, all the funds are made available in your account. However, the item may still be returned after the hold period for reasons other than insufficient funds. The lifting of the hold does not guarantee that an item will not be returned. If you are concerned, please contact your local branch for assistance.
RBC Branch Locator
Although the Bank does not guarantee that a cheque/item deposited will not be returned at a later date, you can ask yourself the questions set out above in "Tips and Questions to Consider," to help you understand the risks associated with a particular item. Your responses should provide you with an indication/comfort level with respect to the items being negotiated. If you are uncomfortable with the potential risk associated with the item being cashed/deposited (based on your responses), please contact your local branch as per the above for assistance.
If your account has enough funds to cover the item subsequently returned, it will not affect your credit rating. If, however, your account is put into an overdraft position, exceeding the approved limit, this could affect your credit rating if not dealt with immediately. Please contact your branch immediately if this happens to you.
