Deferred Availability

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DEFINITION of 'Deferred Availability'

A delay in the availability of funds to the holder of a commercial bank account upon depositing a check as his/her bank awaits payment from the paying bank. Regulations require banks to limit the hold to no more than two days for local checks and no more than five days for out of town checks. There is an exception for new accounts where regulations allow banks to delay the availability of funds for up to 30 days.

BREAKING DOWN 'Deferred Availability'

Regulations allowing a delay in the availability of funds were created to deter fraud and embezzlement schemes that involve cashing bad checks before they are cleared.

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