Check use is becoming less frequent, especially since more people are adopting electronic banking. But there are still people who like to use these slips of paper to conduct transactions. Maybe you're a landlord whose tenant writes out a check for the rent each month. Or perhaps your dear old aunt still sends you a check for your birthday every year. Whatever the reason, you should be aware that you may not have access to the full amount right away when you deposit it into your bank account—even if your balance indicates otherwise.

If you try to use the funds right away, you may run into problems—even bouncing payments and getting charged by your bank. So it pays to understand the basics of checks and hold times. Read on to find out more about how long it takes for checks to clear and how you can avoid costly fees that may result from any misunderstandings.

Key Takeaways

  • Financial institutions always outline their hold policies when you open up a bank account.
  • Most checks take two business days to clear.
  • Checks may take longer to clear based on the amount of the check, your relationship with the bank, or if it's not a regular deposit.
  • A receipt from the teller or ATM tells you when the funds become available.

General Hold Times

When you open up a bank account, financial institutions always outline their policies about deposits, including hold times for check deposits. Banks place these holds on checks in order to ensure the funds are available in the payer's account before giving you access to the cash. By doing this, they help you avoid incurring any charges—especially if you use the funds right away.

It usually takes about two business days for a deposited check to clear, but it can take a little longer—about five business days—for the bank to receive the funds. How long it takes a check to clear depends on the amount of the check, your relationship with the bank and the standing of the payer’s account. Wait a few days before contacting your bank about holds on deposited checks.

Of course, the hold time often depends on the nature of the check. A bank may choose to hold a check longer if it's an unusual deposit if you've never deposited a check from that payer before, if the check is for a large amount, or if the check is from an international bank. The latter requires a much longer hold time because it can't be easily verified. Hold times for these checks depend on your institution, so you should check with someone about the policies.

Check hold policies vary between banks, so check with your institution about how long you have to wait to access the funds.

Why Your Check Is on Hold

There are several reasons banks hold checks. Your bank may hold a deposited check if there are insufficient funds in the payer’s account or if the payer’s account is closed or blocked for some reason. Banks usually resend checks with issues to the paying institution, but this results in a longer delay for the depositor.

Some banks also issue holds for deposits on new accounts. Accounts that have no or little history may automatically qualify for holds on all check deposits until the time that the bank feels you have solidified your relationship with it. Accounts that have negative history—that is, accounts that frequently bounce payments or go into overdraft—may also have checks held.

The payer also has a lot to do with hold times as well. If you've never deposited a check from that person before—and it's a sizable amount—your banking institution may choose to hold it until it clears.

Certain institutions may hold checks that are deposited through mobile banking apps or through the automated teller machine (ATM). These deposits have to be verified and cross-checked before the bank can release the funds. It's always a good idea to check with the bank about its policy when it comes to hold times for these types of deposits.

Your Deposit Receipt

When you deposit a check, whether at an ATM, a teller’s counter inside the bank, or a drive-through window, you typically get a receipt that usually says when the funds will be available. Keep the receipt handy until the check clears. The funds-availability date on the receipt lets you know when it may be time to contact the bank regarding hold inquiries. If you don’t receive a receipt, however, you’ll need to contact your bank to check on this.

There are times when the bank will override the hold for you. In cases of emergency, if the hold has been on too long, if you're a really good customer, or if the bank decides to verify the check at the time of the deposit, you may be off the hook. That generally requires a trip to your branch. Although it will cost you some time, it may be worth it if you need the funds right away or if it's a large check that just can't wait.

Funds Availability

Depending on the amount of the check, you may have access to the full amount in two days. Some banks make a portion of the check available immediately or within one business day. For example, your bank might make $150 or $200 of a $500 check available immediately, or within one business day of the deposit, and make the balance of the check available in two days.

The bank may be likely to clear checks right away if you have a consistent history with a certain payer. Say, you're a freelancer and receive checks every other month for work you do for that company. The bank may hold the initial check to make sure it clears. If you let them know you are expecting similar checks from the same company on a regular basis, the bank may release the funds to you for subsequent deposits after a pattern is established.

Large Deposits

It bears mentioning again that large deposits may come with a longer hold time. Some banks may hold checks that total $1,500 or higher for as many as 10 days. The number of days the bank holds these checks depends on your relationship with the institution. You’re more likely to get the money immediately—or within fewer than 10 days—if you have a healthy account balance and no history of overdrafts. A history of overdrafts and low account balances may mean you’ll have to wait the full 10 days to receive the money.