What is a 'Stop Payment'

A stop payment is a request made to a financial institution to cancel a check or payment that has not been processed yet. A stop payment order is issued by the account holder, and can only be enacted if the check or payment has not already been processed by the recipient.

BREAKING DOWN 'Stop Payment'

Issuing a stop payment order often costs the bank account holder a fee, which is levied by the financial institution. There are several reasons that a stop payment order may be requested. For example, the account holder may have sent a check for the wrong amount, or may have canceled a purchase after having put the check in the mail.

RELATED TERMS
  1. Returned Payment Fee

    A charge a credit card company may assess to a customer’s account ...
  2. Down Payment

    A type of payment made in cash during the onset of the purchase ...
  3. Amortizing Security

    A class of debt security in which a portion of the underlying ...
  4. Payment Option ARM Minimum Payment

    An option to make minimum payments on an payment option ARM, ...
  5. Finality Of Payment

    Refers to the instant that a payment to another party is completed, ...
  6. Check

    A written, dated and signed instrument that contains an unconditional ...
Related Articles
  1. Personal Finance

    Is Making Biweekly Mortgage Payments A Good Idea?

    Do you think making two payments a month for your mortgage is a good idea? Think twice about that. We tell you why.
  2. Trading

    A Logical Method Of Stop Placement

    If holding on to losing trades is human nature, this tool will help protect you from yourself.
  3. Investing

    When Using a Money Order Makes Sense

    Money orders are usually the least expensive way to send "cleared" funds to pay a bill (or traffic ticket). Here's how they work and what to watch out for.
  4. Trading

    Increase Your Profits With Soft Or Mental Stops

    A soft stop provides a trader with added flexibility, allowing him to react to ongoing changes in the market.
  5. Insurance

    How to Get Rid of Private Mortgage Insurance

    Private mortgage insurance benefits the lender (the sole beneficiary of PMI), but it can add a sizable chunk to your monthly house payment.
  6. Investing

    Understanding Buy Stop Orders

    A buy stop order is an order to buy a stock at a specific price above its current market price.
  7. Investing

    Mastering Stop Placement

    Place the stop loss where, if hit, the reasons you took the trade are no longer valid.
RELATED FAQS
  1. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  2. What is the difference between a buy limit and a stop order?

    Learn the difference between buy limit orders and stop orders, including stop loss orders, and understand the risks of the ... Read Answer >>
  3. What does "gather in the stops" mean?

    "Gather in the stops" is a trading strategy used by investors to trigger stop orders already in place so that the price of ... Read Answer >>
  4. Is a deficit in the balance of payments a bad thing?

    Discover how it might be possible to run a balance of payments deficit, what that means in terms of international trade and ... Read Answer >>
  5. What's the difference between cash-on-delivery differ and delivery against payment?

    Find out more about cash on delivery and delivery versus payment transactions and the difference between these two types ... Read Answer >>
  6. When do checks expire?

    There is a legal grace period for cashing checks, but depositors and issuers may risk overdraft fees if a late check is presented ... Read Answer >>
Trading Center