Checks are a means of monetary transfer that save participants in a transaction the hustle of dealing with large wads of cash. However, the fact that it’s not cash means there are risks involved in a transaction and as a result, the processing of checks in banks when one is cashing in requires a period of time known as hold time to accord the bank sufficient time to scrutinize the check.
Banks and credit unions usually differ non the amount of time they take clear a check in order for the funds to believe and in order to ensure the clients is served rightfully, the federal law, has set various lengths of hold times depending on the nature of the check being processed. This ensures equity regardless of the policies of specific banks.
to begin with, there is the statutory hold which is applied in the sense that the $200 will be deposited into the account on the first business day after which the remainder will be made available on the day after that. on the other hand, there is the large deposit hold which is applicable when the check is over the excess of $5000 or when the total amount of checks deposited into the account exceed $5000. In this case, the bank is entitled to release $5000 on the second business day after the deposit is made. The remaining funds are expected to be deposited into the account on the seventh business day after one deposits the check. For new accounts (accounts which have been active for less than 30 days), the hold time is extended to 9 business days after the check is deposited after which the funds can become available in ones account.
Some checks are also accorded preferential treatment in that when deposited they have a different hold time policy regardless of their amount. Banks are required to provide $5000 in the accounts of these checks by the first business day after the check is deposited at the bank through a cashier.
The following checks are granted this privilege:
1. Postal money orders.
2. U.S Treasury checks.
3. Certified checks.
4. Checks issued by municipalities, cities, counties or states.
5. Checks drawn from an account that is at the same depository institution.
6. Checks drawn on a Federal Home Loan Bank or a Federal Reserve Bank.
However, checks must not be necessarily deposited at a cashier. Clients who would like to deposit their checks for money while they are not close to a bank have the option of doing so at an ATM. When one opts to deposit money at an ATM, then the hold time will be extended to the second business day after which all the money will become accessible for withdrawal. However, this may take much longer if one opts to deposit the check at an ATM which is not own by that specific credit union or bank.
It should also be noted that the deposit slip one is given after making a deposit at a cashier is not an indication that the funds have been released to your account. To know the date when the funds will become accessible, it is advisable for one to inquire from the bank.