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When you deposit money into your bank account, you can’t necessarily use the money right away. Your financial institution may put a hold on a portion of your funds as they process the transaction and make sure it clears.
Whether or not all your cash is available can depend on a variety of factors, such as the form of the deposit; the amount of money involved; and when and where the deposit was made. Your money might be ready to use almost immediately, or it could take a few days or even longer. The timing can depend on both federal regulations and a bank or credit union’s internal guidelines for processing deposits. Here’s what you need to know.
Key Points
• Banks place holds on deposits to verify funds and prevent financial losses.
• Federal regulations limit hold durations, ensuring quick access to initial deposit amounts.
• Cash and electronic payments generally clear faster than checks.
• Exceptions to standard hold times include large deposits, new accounts, and suspicious transactions.
• Review bank policies and manage funds carefully to avoid overdraft fees.
Why Do Banks Put a Hold on Deposits?
Banks hold deposits to protect themselves, as well as their customers, from losing money. If a check you deposit bounces or some other complication arises, the bank will have an opportunity to fix the problem before you have the opportunity to spend the funds.
While a delay in being able to access your own money may seem like a nuisance, holds can actually help protect you from fraud and fees.
If your bank allows you to spend funds from a check that later bounces, you would have to repay the bank the amount that they gave you, and likely also get hit with a hefty overdraft fee. This is the case regardless of who is at fault.
How Long Can a Bank Hold a Deposit?
The amount of time it takes for funds to become available can depend on a number of factors, including how long you’ve held your account, your financial history, the type of deposit (e.g., cash, check, direct deposit), and the amount of the deposit.
• Generally, a bank or credit union has until at least the next business day (a business day is a weekday that is not a holiday) to make most deposits (or a portion thereof) available.
• Electronic deposits are typically available on the same day. So, one way to make sure your paycheck is available to you quickly is to sign up for direct deposit into your checking account.
• Cash deposits may clear immediately or the next business day.
• The longest a bank can hold funds is usually five business days for money deposited at an ATM of a different bank.
• While each bank or credit union has its own rules as to when it will let you access the money you deposit, federal law establishes the maximum length of time a bank or credit union can make you wait.
The amount of money deposited can also matter, with the current guideline specifying that the first $275 of a check must be made available according to schedule.
Here are the rules set by the Federal Reserve for making funds available the next day or longer.
• Cash deposited to your bank account in person or to an in-network ATM.
• The first $275 of a check deposited in person or at an in-network ATM.
• Electronic payments, like a domestic wire transfer
• U.S. Treasury checks deposited in person or at an in-network ATM.
• U.S. Postal Service money orders deposited in person to one of your employees and into an account held by a payee of the check.
• Federal Reserve Bank and Federal Home Loan Bank checks deposited in person.
• State or local government checks deposited in person.
• Cashier’s, certified, or teller’s checks deposited in person.
• Checks drawn on an account held by the same institution as your account, deposited in person or at an in-network ATM.
For cash, USPS money orders, Federal Reserve Bank and Federal Home Loan Bank checks, state or local government checks, and cashier’s, certified, and teller’s checks that are deposited to out-of-network ATMs, the funds must be made available by the second business day. Deposits made by cash, non-USPS money order, or check at out-of-network ATMs must be made available by the fifth business day.
You may want to keep in mind that the hold times listed above are the maximum allowed. It’s possible that your funds will be available sooner.
You can typically find specifics about your bank’s funds availability policy in the account agreement you received when you opened your account, or you can ask the bank for a copy of their holding policies.
Understanding Cut-Off Times
When you deposit a check to your checking account, you may think you did it “today.” However, you may have missed the cut-off for starting the deposit process on that calendar day.
If you make a deposit after the cut-off time, your financial institution can treat your deposit as if it was made on the next business day. If the deposit was made late in the day on a Friday, it could actually take three or more days for the money to show up in your account.
By law, a bank or credit union’s cut-off time for receiving deposits is generally no earlier than 2 pm at physical locations and no earlier than noon at an ATM or elsewhere. Sometimes banks have later deposit times for mobile deposits (made via the bank’s phone app), such as 5 pm.
Deposits That May Take Longer to Become Available
There are certain circumstances under which banks are allowed to hold deposited funds for longer than the times listed above.
When these exceptions apply, there isn’t always a clearly defined limit to the amount of time the bank can hold funds. The bank can generally hold funds for a “reasonable” amount of time.
Exceptions to standard holding times include:
Large Deposits
If a customer deposits more than $6,725, the bank will typically need to make the first $275 of the funds available on the next business day, then a total of $6,725 the business day after that, but they are allowed to put a longer hold on the remaining amount.
Redeposited Checks
If a check bounces and then is redeposited, banks may hold the funds for longer than one business day. (You may want to be cautious about accepting future checks from a person or business that has already bounced a check.)
Recommended: How to Deposit a Check
Accounts That Have Been Repeatedly Overdrawn
If a customer has a history of overdrawing their account, the bank may go beyond charging overdraft fees and also hold funds for more time before making them available for use.
Repeatedly overdrawn means that the account has had a negative balance on at least six business days within the past six months, or the account was $6,725 overdrawn more than twice within the past six months. (One note: If you are in this situation, you may want to consider the pros and cons of overdraft protection.)
Reasonable Doubt
If a customer deposits a check that seems suspicious, the bank may hold funds for a longer period of time. A check may seem suspicious if it’s postdated or it’s more than 60 days old. (Typically, how long a check is good for is about six months, but it may cause concern after two months has passed.)
New Bank Accounts
If you recently opened a bank account and your account is less than 30 days old, you may experience hold times of up to nine days. Official checks and electronic payments, however, may be partially available the next day.
Emergency Conditions
If there is a communications outage, a natural disaster, or another circumstance that impedes normal bank functions, banks can hold funds until they are able to provide the funds.
The Takeaway
When you deposit a check, you naturally expect the money to show up in your bank account. Banks generally make funds available on the business day after you make a deposit, but there are exceptions that keep funds on hold for several days. Knowing the federal and your financial institution’s policies about holding times can help ensure that you’re able to pay your bills on time, have access to cash when you need it, and don’t get hit with overdraft fees.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
What is the $275 availability rule?
This rule states that the first $275 of a given day’s deposit must be made available on the next business day.
How long can a bank hold onto a large check?
When you deposit a large check, the first $275 is typically available the next business day. The rest of it, up to a total value of $6,725, is usually accessible within two business days, and the remainder potentially held for several more days as the bank verifies the check’s validity.
How long does it take for a $30,000 check to clear?
It will typically take about two to five days for a $30,000 check to clear.
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