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Have you ever deposited a check in your bank account, only to find the money isn't immediately accessible? Banks sometimes place holds on checks, which can cause problems if you need to use your deposit right away to pay bills. Here's what you need to know about check holds so you can minimize the odds that a hold on your deposit will leave you short of funds.
What Is a Check Hold?
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. However, this timeline can vary depending on factors including the amount and type of check, the issuing bank and whether you deposit the check with a teller or use an ATM or mobile banking app.
Banks and credit unions must follow a federal law, Regulation CC, governing when they can place a check hold, how long the hold can last and how customers must be notified. Within this law, however, financial institutions can set their own check hold policies. For example, some banks may let you access your funds faster by paying a fee.
Check holds can pose difficulties for your finances. For example, suppose you have $100 in your checking account. You deposit a check for $1,000 on Monday morning and hand a check for $900 to your landlord on Monday afternoon. Your landlord immediately tries to cash the check, but it bounces because your $1,000 deposit hasn't cleared yet. Overdrafts and nonsufficient funds can mean bank fees.
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Why Is My Check on Hold?
Placing check holds gives banks and credit unions time to confirm that a check will clear. In most cases, the first $225 of a check will be available the business day after the check is deposited; any amount over that will be available the following business day.
However, Regulation CC includes some exceptions to this hold policy. Financial institutions may hold your check longer than two business days if:
- Your account was opened within the past 30 days.
- A check was returned unpaid and you're trying to re-deposit it.
- You deposit checks totaling $5,525 or more in a single day.
- Your account has a negative balance or has been overdrawn six or more times in the past six months.
- The bank or credit union has good reason to think the check won't clear.
- You deposit a check at an ATM not owned by your bank or credit union.
- The check is deposited under "emergency conditions" out of the bank's control, such as a war, natural disaster or computer system outage.
How Long Can a Bank Hold a Check?
Most check deposits of $225 or less become available the next business day after deposit. For larger deposits, any amount over $225 is generally available the business day after that.
Saturdays, Sundays and federal holidays are not considered business days, even if the bank is open on Saturdays. For example, if you deposit a check for $225 on Saturday, Monday is considered the day of deposit, and the full amount will be available on Tuesday. If you deposit a check for $500 on Saturday, $225 becomes available on Tuesday and the other $275 becomes available on Wednesday.
Regulation CC requires "next-day availability" for certain types of check deposits. Checks that must be made available on the first business day after deposit include:
- Electronic payments (such as direct deposited paychecks)
- U.S. Treasury checks deposited in person to a teller or at an ATM owned by the bank
- Federal Reserve Bank, Federal Home Loan Bank, cashier's, certified or teller's checks, and state or local government checks deposited in person to a teller
- Checks drawn on the same bank where they're deposited and deposited in person to a teller or at an ATM or night depository on the bank's premises
However, banks can hold checks longer than two business days if the time frame is "reasonable." Here's how long various types of check deposits may be placed on hold.
- Checks deposited into an ATM your bank doesn't own: Up to eight business days after deposit
- Checks over $5,525: Up to seven business days after deposit
- Checks deposited into a new account: Up to nine business days after deposit
- Checks subject to other exception holds: Up to seven business days after deposit
Your bank's cutoff time for deposits also affects how long a check hold may last. Each bank or credit union sets a cutoff time denoting the end of the business day. Deposits made after cutoff time are considered to be made on the following business day. By law, 2 p.m. is the earliest cutoff time for deposits at a physical bank branch; noon is the earliest cutoff time for ATM deposits. There may be different cutoff times for checks deposited with your bank's mobile app.
Financial institutions must notify customers of possible check holds by posting notices in places where customers make deposits (such as at ATMs or in the bank's lobby). If your bank or credit union puts a longer hold on your check deposit, they're required to notify you of the amount of the hold, the reason for the hold and when the full deposit will be available. You'll receive this notice in person if you deposit a check with a teller; otherwise, you may be notified by email, text message, within your mobile banking app or by mail.
How to Avoid Check Holds
Check holds can throw your finances into disarray, leading to overdraft fees or nonsufficient funds fees. Fortunately, there are things you can do to reduce the chances of a check hold or to minimize its effect on your bank account.
- Understand your account's terms. Check hold policies may differ from one financial institution to another. Familiarizing yourself with your bank's check hold rules will help you avoid unpleasant surprises after cashing a check. Look at your account disclosures or deposit account agreement documents.
- Opt for direct deposit whenever possible. Direct deposits must be accessible the business day after the bank receives them. In fact, many banks and credit unions make direct deposits available immediately.
- Deposit checks in person. A trip to the teller is typically the fastest way to get access to your deposit.
- Deposit checks before the bank's cutoff time. Be aware of different cutoff times your bank may impose for in-person, mobile or ATM deposits.
- Evaluate check hold times when choosing a bank. Before opening a new bank account, consider how quickly you can access check deposits.
- Sign up for overdraft protection. Overdraft protection covers transactions when your account is short of funds, which can minimize the negative impact of a check hold. Overdraft protection pulls money from a linked bank account or uses funds advanced by the bank. You'll need to weigh fees for overdraft protection against the potential fees for overdrawing your account, and keep in mind that excessive overdrafts could lead to more check holds.
- Set up account alerts. Visit your bank's website or mobile app to sign up for alerts via text, email or push notification. Getting notified when a deposited check posts to your account or your balance drops below a certain amount helps keep you on top of your bank balance.
The Bottom Line
Being aware of your bank's check hold policies will help you avoid running short of funds. If you're thinking about opening a new checking account, the Experian Smart Money™ Digital Checking Account & Debit Card can help you build credit without debt by automatically linking to Experian Boost®ø, which gives you credit for eligible bill payments after three months of payments. You'll also pay no monthly fees¶ for Experian Smart Money, have access to more than 55,000 fee-free ATMs worldwide** and could receive your paychecks up to two days early when you enroll in direct deposit†. You can get an Experian Smart Money Account through a free or paid Experian membership, which also gives you access to your FICO® Score☉ , Experian credit report and more. See terms at experian.com/legal.