Check writing is becoming less and less frequent thanks to the prominence of credit cards and the growing digitization that defines the financial sphere. That said, checks still exist, and it’s important to know how long it takes a check to clear.
Depositing a check into your bank account doesn’t mean you’ll have immediate access to that money. Your current bank balance may say that you do, but that isn’t always the case.
Read on to learn more about why the bank can hold your check, potential reasons behind processing delays, and what to do about suspicious checks.
Why your check is on hold
Whether or not banking institutions will hold a check depends on the bank itself and your account type. If this occurs and you try to use the funds before they are officially available, you may risk the check being bounced or paying extra fees.
How long does it take for a check to clear?
A check clearing doesn’t mean that money will immediately be deposited into your checking or savings account.
Most financial institutions have policies surrounding checks and their holding times. A bank usually holds a check to ensure that the funds are available to be transferred.
Clearing checks takes approximately two to five business days, meaning it takes two to five business days for the bank to receive the money.
The length of your check’s hold depends on the check’s amount, the account holder’s available balance, and even your relationship with your bank. If it takes longer than five days, don’t be afraid to contact your bank and inquire about the state of your deposited check.
Why do processing delays occur?
Processing delays can happen for many reasons. The most common reasons are below.
One: It's an unusual deposit. The bank may flag the check if it’s for a considerably large amount, comes from a new client, or comes from an international bank.
Two: There are insufficient funds in the payer's account. Banks typically resend checks with issues, like not having enough money in their account, to the payer’s institution. This causes a delay in processing.
Three: New accounts. If you’ve just recently opened a new checking or savings account, the bank may hold your check until you’ve built up some history.
Four: ATM deposits. If you deposit a check through an ATM or make a mobile deposit through a banking app, the bank can hold it to verify it.
When you deposit a check, you’ll receive a receipt recording the transaction that indicates when the allocated funds will become available. Keep this with you in case any issues arise with the balance.
Banks can override holding time, though this doesn’t usually happen. Your bank will most likely intervene for any financial emergencies if you’re a longstanding and reliable customer or if the hold on the check is longer than necessary. That said, sorting this out will require a physical trip to the bank.
Risk of bounced checks
Checks may run the risk of being bounced if there are indications of fraud. If you trust the person or the organization that wrote the check, it’s likely safe to deposit the check and start spending the money.
On the other hand, if you don’t trust the check writer or don’t know them, you should wait to use the funds in case there are any underlying problems.
Remember that as the payee, you may be responsible for replacing the check's funds if you withdraw the deposited money early and the check bounces. Overdrafts — when your bank covers the negative balance — come with hefty fees. If you can’t cover the funds, your credit account’s available balance will likely fall into negative standing. You won’t be able to use your debit card or write checks for a short period, and you’ll face costly fees.
How to find out if a check has cleared
Always check with your bank to learn about their policies surrounding checks and depositing. These guidelines usually outline how long it takes for a check to clear.
Generally, checks remain valid for up to six months after their signed date. While it is best to deposit checks as soon as possible, that might not always be an option — and that’s okay.
Unless a problem occurs, your bank is legally responsible for making the funds available within a reasonable amount of time.
What to do about suspicious checks
According to Federal Trade Commission data, over 27,000 people reported fake checks in 2019, resulting in more than 29 million in total losses.
You can take the following steps to prevent this from happening to you:
Step 1: Avoid checks. If you’re unsure about the check writer or whether the funds are actually valid, this is the safest option.
Step 2: Contact the bank. Try contacting the payer’s bank to determine if the funds are genuine. If the check is fake, the contact information included will be useless, so look up the branch’s customer service number yourself.
Step 3: Wait 30 days. Unfortunately, weeks can pass before you find out if a check was legitimate or not. Don’t deposit the check if you think it may be fraudulent. However, if you’ve already done so, refrain from spending that money for at least 30 days. Give yourself a window to confirm that the check is genuine in order to avoid fees or debt.
Alternatives to checks
Remember, you can use alternative payment methods if you’re not entirely comfortable with a check. This can include wire transfers or online platforms such as PayPal, Venmo, or Apple Pay. Paypal only transfers the desired amount into your account if the money really exists. Venmo and Apple Pay, like e-transfers, are popular and reliable methods for you to transfer money back and forth from anyone through a secure network.
Whatever method you prefer, always be on the lookout for strange activities. Contact your bank or the payer if you have any questions.
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