Table of Contents
- A check typically takes two to five business days to clear, depending on the type of check deposited
- Federal law sets rules for check clearing, but banks have their own criteria to verify details before customers can access the money
- Personal checks take longer to clear than cashier’s checks, certified checks, or checks issued by the government or the same financial institution
- Factors that affect the check clearing process include the type of check, the amount, account standing, and the customer’s relationship with the bank
- Tips for managing check clearing include monitoring the type, amount, and date of the check deposited, and considering using electronic methods such as direct deposit or P2P services
How long does it take for a check to clear?
When a check clears, it doesn’t always indicate that the money will be put right away into the payee’s bank or savings account. Generally, financial institutions clear checks in two to five business days; although, this can vary based on the type of check deposited. Holidays and weekends may extend the time for a check to clear.
Some checks clear quickly in comparison to a typical check. The checks below are usually cleared by the following business day:
- Checks issued by the government
- Certified checks
- Cashier’s checks
- Checks from the same financial institution
Factors that affect check clearing
Checks and their holding periods are subject to regulations at financial institutions. A bank often holds a check to make sure the money is accessible for transfer and the check doesn’t bounce. The length of this hold depends on the type of check, the amount, account standing, and the customer’s relationship with the bank.
Personal checks typically take longer to clear than cashier’s, certified, or money orders because personal checks bounce more often. Since a cashier’s check is guaranteed by the issuing bank’s funds, it’s less likely to bounce, but the bank can still place a hold on it if it is for a sizable sum of money.
Under federal law, banks must make the initial $225 from a larger deposit available by the next business day. This means if you deposit a check on Monday, you can expect to have $225 available on Tuesday and the rest on Wednesday. If your check hasn’t cleared after five days, you should contact your bank for more information.
Here are some of the factors that can cause a check to take longer to pass.
- A new bank account: The bank may retain any checks deposited automatically if the checking or savings account is created recently. Once the first check clears successfully, the bank may raise the deposit limit.
- History of multiple overdrafts: If the account has a history of overdrafts or bounced checks, then the bank may take longer to clear a check.
- Check amount: As per Regulation CC (the rules that U.S. banks must follow when processing checks), banks can hold checks above $5,525 for a longer duration to ensure fund availability and rule out fraudulent activities.
- International check or an unfamiliar payer: If a check is deposited from a particular payer or if it is from a foreign bank account, then the bank may take a longer time to verify the source account and fund availability.
- ATM deposits: If the check is deposited through an ATM or mobile application, the bank can hold it for verification. This can take even longer if the bank does not own the ATM at which the check is deposited.
Tips for managing check clearing
- Monitor the type, amount, and date of the check deposited; holidays and weekends may increase the time it takes for funds to be available in the payee’s account.
- Ask the payer to use electronic methods such as direct deposit, wire transfer, or P2P services (through Venmo, Zelle, Paypal, etc.) for payments because these alternatives are generally faster, inexpensive, and completely digital—unlike checks.
- Be sure to read the deposit agreement and check the clearing norms set by your institution.
Understanding The Check Clearing Process to Avoid Potential Extra Fees
The financial institution needs to get the money from the payer’s account to process a check. If the account is held with a different financial institution, the check is sent to a clearing house for the processing, which can take a few days. Deposit the check at the beginning of the week or before scheduled holidays to avoid delays.
The bank account disclosures and deposit agreements should be carefully reviewed before depositing a check to avoid any fees and get access to funds. Check with the bank for any potential charges in case of an international check.
Generally, a check gets cleared within one or two business days. The bank may hold a check for longer in some scenarios, such as a large deposit amount, a history of multiple overdrafts, or an international check.
Please carefully review the bank account documentation and norms to understand the check hold and clearing conditions. The check must clear before the funds are utilized to avoid any fees.