Normally you expect a check deposits to clear immediately. However, that is not the case with this type of deposit. When you deposit a check, you’ll have to wait for a few days before it clears. But, there is an exception. Not all checks take a few days to clear. Some checks clear almost immediately. What type of checks could this be?
Normally, it takes a check around two business days to clear. But this doesn’t apply to certain types of checks such as cashier and government checks, including checks drawn on the same financial institution that holds your account.
After depositing a check, the money isn’t made available immediately. The check is held to verify that the funds are actually in the account before making the money available to the receiving party. This hold, which is around two days, isn’t for all checks. Some checks go through faster, and I will talk about these checks in the article coupled with a few important details regarding why checks take time to clear.
How Do Investment Banks Make Money?
What Checks Clear Immediately?
Many years back, people embraced the use of checks to send money and make payments. Today, the use of these papers is dwindling, especially since the rise of electronic banking. However, that doesn’t mean that people have neglected the use of checks. People still use these slips of paper to make transactions. For instance, maybe you are a business owner whose trusted client pays using a check. Or, maybe your lovely uncle still sends you a check for Christmas every year.
Regardless of the reason, you should note that you may not have access to the whole amount immediately after you deposit it into your bank account, even if your balance says otherwise.
If you attempt to use the funds immediately, you may encounter several issues like bouncing payments and huge charges from your bank. Thus, it pays to grasp the fundamentals of checks, including hold times.
Read on to know more about checks, the general hold times, how you can speed up its clearance, including the checks that clear fast.
Let’s begin with why checks take time to clear.
Why the Delay?
We live in an era where things are quite fast. There are bullet trains that travel at 320km/h. We have the 5G internet, the race cars and other stuff that moves at great pace. Given that, why would it take a mere piece of paper a few days to clear?
Here is the answer.
You see, to process a check, your bank or whichever financial institution you use needs to get the funds from the payer’s checking account. If the account is at another bank, the check will be sent to a clearinghouse that takes care of the request.
It Can Take Some Days:
If the check isn’t considered “risky”, it is below $5,525, your bank account has been open for over 30 days, there isn’t a history of several overdrafts, and there are zero reasons to think that the check is fake, your bank may choose to credit your account before the check clears.
If, however, things go south and the bank finds out that the check can’t clear because the payer’s account is overdrawn, for instance, your bank could take the money back out of your account. Ensure that you have good insights into your deposit agreement and disclosure forms for more information on your bank’s rules and regulations.
General Hold Times:
When you visit a financial institution to open an account, it often lays out its rules and regulations regarding deposits, including hold times for check deposits. Banks don’t place these holds for no reason. The hold is placed to ensure that the funds are available in the payer’s account before allowing you to get the cash. By doing this, they help you prevent incurring charges, particularly if you use the funds immediately.
It often takes around two business days for a deposited check to clear. However, it can take longer than two days (around five business days) for the bank to get the funds. How long it takes a check to clear depends on the amount of the check, your closeness with the bank, and the nature of the payer’s account. If a hold is taking too long, wait a few days before contacting your bank.
Hastening Check Clearance:
Going for a bank that clears checks pronto is one of the best ways to get money faster. Banks pay close attention to the financial habits of account holders when choosing whether your deposit can be trusted. Thus, the lower risk you are, the better for you.
Stashing money in the bank is great. However, you can also hasten things up by being a reliable account holder who seldom, if ever, bounces checks. This may mean deciding not to accept a check as payment from individuals you don’t trust.
Checks That Clear Fast:
It usually takes a check a few days to clear, depending on the nature of the check. However, certain types of checks go through within 24 hours. These checks are cashier and government checks, including checks drawn on the same financial institution that holds your account.
Cashier checks go through faster because they are issued by a bank and paid out of banks funds and not a customer’s account. Government checks clear faster because they are more reliable than customer checks and the chances of the account being overdrawn are low.
What Time Do Checks Clear?
Many people embrace check deposits because it is one of the safest ways to send money to families and loved ones. The major disadvantage of this money transfer method is the slight delay. When you deposit a check, it doesn’t clear immediately. It takes some time. How much time are we talking about here?
Typically checks go through within two business days. However, some banks and credit unions are faster. Usually, the first 200$ of a check is made available the business day after the bank gets the check.
If your check is taking more time to clear, don’t hesitate to contact your bank to determine the status of your check.
