Banks are financial institutions that help us keep our money. And aside from that, they provide us with effective means to access and transfer our money. Some of these means include ATMs, wire transfers, and one of the most common, check deposits. Check deposit is one of the fastest and easiest ways to send money. Sending money via this means requires you to wait for some time for the funds to clear. But what if you decide to transfer a massive amount of money? How long will a bank hold the check?
Usually, it takes around two business days for a regular check to clear. But, if you are sending a considerable amount of money via check deposit, expect your bank to hold on to the check for 7 days or more. They do this to safeguard you from fraud and incurring charges.
While there are several means to send and receive cash, people always make selections based on their preferences and needs. For instance, if you fancy check deposits because of the convenience it brings, you might want to figure out if making huge payments using the means is possible. If yes, it makes sense to ask how long the bank will hold it. Below I have provided information regarding the check hold times of banks, why your check is on hold, and a bit more.
How Long Will Bank Hold Large Check?
Check used to be less common, especially since more individuals are embracing e-banking. But there are still those who prefer to use these slips of paper to carry out transactions. For instance, say you are a landlord whose tenant writes out a check for the rent per month. Or maybe your sweet old uncle still sends you a check as a gift for your birthday.
Whatever the reason, you should note that you may not have access to the entire funds immediately (especially if it’s a huge amount) when you deposit it into your bank, even if your balance says otherwise.
If you try to use the money in your bank account immediately, you may encounter issues, like bouncing payments and get charged by your bank. So it makes sense to understand the basics of checks, including hold times. This is very important for those who have the habit of sending a huge amount of money via check deposit.
General Hold Times:
Topics about the general hold times for checks can be confusing. You deposit a check and expect it to clear the next few days later. Instead, it doesn’t leaving you scared. If you aren’t sure of how the general hold times work, here is a little insight.
You see, when you visit a bank to open an account, the bank will state their policies regarding deposits, including hold times for check deposits. Banks and other financial institutions place these holds on checks to ensure that the funds are available in the payer’s account before allowing you to access the cash. By so doing, they help you prevent incurring any charges, particularly if you spend the funds immediately.
It often takes about two business days for a deposited check to clear. However, it can take a little longer, around five business days, for the bank to get the funds. The time it’ll take for a check to clear depends on the check amount, your standing with the bank, and the payer’s account status. Wait for some time before reaching out to your bank regarding holds on deposited checks.
Of course, the hold time depends on the nature of the check. A bank may decide to hold a check longer if it is a strange deposit, if you have never deposited using that payer before, if the check is for a huge amount, or if the check is from an international bank. The latter requires a much longer hold time as it can’t be easily approved. Hold times for these checks hinges on your bank, so you should check with your bank regarding the policies.
Why Is Your Check on Hold?
Why is it that the check you send doesn’t clear in time? Why do banks hold your check? You see, the truth is, there are multiple reasons why your bank may hold your check. It may hold a deposited check if there are inadequate funds in the payer’s account or if the payer’s account is closed or blocked for one reason or the other.
Banks often resend checks with issues to the paying institution, but this results in a lengthy delay for the depositor. Some banks also issue holds on new accounts. Accounts that have zero or little history may automatically qualify for holds on all checks deposits until the bank feels you have enhanced your relationship with it. Accounts with a bad record, accounts that often bounce payments or go into overdraft, may also have checks held.
The payer also has a significant part to play regarding hold times. If you have never deposited a check from that individual before, and it is a considerable amount, your bank may decide to hold it until it clears.
Some banks, credit unions, etc., may hold checks deposited via means like mobile banking apps or via the automated teller machine. These deposits have to be confirmed and inspected before the bank can release the funds. It always makes sense to contact the bank to learn about its policy regarding hold times for these types of deposits.
How Long Will a Bank Keep a Huge Check?
A large amount of money usually draws the attention of banks and other financial institutions. Thus, if you are sending a huge amount of money via check deposit, expect the bank to hold on to it for some time to conduct checks on the funds. But, how long will a bank hold on to such funds? Usually, a bank is expected to clear a check deposit within two days. If the deposit involves a considerable amount of money, it may take seven days or more for such a check to clear.
What Is the Longest a Bank Can Hold a Check?
Of course, you are aware that banks hold checks for a period. But what you aren’t aware of is the longest time a bank can hold a check. What is the longest a bank can hold on to your check?
Generally, banks are required to hold a check for two business days for on-us checks (checks drawn against an account at the same bank) and up to five business days (totaling 7) for local checks.
To find out more information regarding hold time, ensure you contact your bank.