How Long to Wait After Depositing a Check
How Long Does it Take for a Check to Bounce?
When you deposit a check, neither you nor your bank know if the check is going to bounce. It’s wise to wait a few days before spending the money, but how long is long enough—and what can you do to protect yourself from bad checks?
For starters, don’t assume you’re in the clear, even if your bank lets you spend money from a deposit.
Funds Availability Rules
Your bank allows you to spend money from most deposits shortly after you deposit a check. But that doesn’t mean that the check is good or that your bank actually received funds from another bank.
Banks are required by law to make a portion of your deposit available to you. Unless there are clear signs of fraud (or other problems), banks follow a funds availability policy, which details how soon you can use your money. In many cases, the first $200 from personal checks is available within one day, and your bank “holds” the remainder for several more days.
It might be helpful to use two different categories to understand when you can spend money:
- Typical situations, when you have no reason to worry about a check that you deposited
- Suspicious circumstances, when you don’t know or don’t trust the check writer
How Long Does it Take for a Check to Clear?
Checks typically take two to three business days to clear. Banks make funds available before checks actually clear, but there are limits on how much you can withdraw or spend. In most cases, 100 percent of the money will be available faster than your bank’s hold policy allows for.
It’s your problem: You are always responsible for deposits you make into your account. Even if your bank lets you walk away with cash or transfer money out, you might have to replace that money later if the deposited check bounces.
Define “clear”: The term “clear” can be confusing, and bank employees may tell you a check has cleared before it really has. To be safe, find out precisely when money transfers from the check writer’s bank to you your bank. If that happens successfully, there was enough money in the check writer’s account, and the check was not an obvious fake.
Your available balance: A check has not necessarily cleared just because the money is available in your account. Again, federal law requires your bank to make the funds available to you within a certain amount of time (whether or not the funds actually arrived from the other bank).
When in Doubt
So what do you do about checks you’re suspicious of? The best advice is to avoid taking checks if you have any concerns about the payment (see below for tips and alternatives), but that’s not always an option.
30 days: When in doubt, waiting for 30 days is a good start. Most problems will arise within that timeframe. Checks from fake accounts and empty accounts should bounce within a few weeks, giving you time to avoid debts with your bank. If the check is from a foreign bank, wait even longer. If there’s a problem with most checks, you should hear about it within 30 days in many (but not all) cases.
Are you 100 percent safe after the money hits your account or after 30 days? Not necessarily. As just one example, an account holder can claim that a check was written from her account fraudulently. Even though the check cleared, your bank will return the funds to the rightful owner (and you need to figure out who scammed you).
More Details About Your Risk
You’re taking several risks any time you deposit a check to your account.
Some of the risks are negligible, but others are significant.
The biggest risk is that you’ll spend money you don’t really have because your bank lets you do so. Banks don’t make you wait for funds to get transferred from a check writer’s bank. Instead, your bank assumes the check is good: You can use your deposit to withdraw cash, spend with your debit card, and pay bills online. Banks do this partly as a customer service gesture, and partly because they’re required to.
Negative account balance: If a check does not clear for any reason, you need to reimburse your bank for any money you spend. That’s a minor annoyance if you’ve got plenty of money (you’ll just have less of it), but it can be a serious problem if your account is running low. A reversed deposit can bring your account into the negative, which means all of your payments will bounce until you fix the problem.
You won’t be able to use your debit card for purchases, and any checks you’ve written in the last few days will be returned unpaid.
Common scams: Whenever you deposit a check you’re unsure of, be especially careful if it’s a large check. Cashier’s check scams work because of confusion about when checks clear, and there’s often nothing you can do to get your money back.
Fees: In addition to finding yourself in negative territory, you also risk paying hefty bank fees when you deposit a bad check. Your bank will charge a fee for insufficient funds, as well as potential overdraft charges. The people or businesses that you write bad checks to may also charge you fees.
Confusing Answers From Your Bank
It’s smart to ask your bank whether or not a check has cleared, but this might not be as helpful as you’d hope. Bank employees often assume you just want to know when you can spend money that’s subject to a hold. They don’t know exactly what your concerns are with a check, and sometimes they don’t even know that checks can bounce long after they’ve been deposited.
Many customers have been told that a check “cleared,” only to find out later that the check bounces. If things go sour, it’s not the bank’s problem or the teller’s problem—it’s your problem.
If you want to verify if a check has cleared, explain your concerns to somebody at the bank. It’s best to talk to somebody that you trust and know is competent. Speak to a manager or visit a branch in person to be sure that there is no confusion.
Alternatives to Checks
If you’re worried about bouncing checks, request payment in different forms. Possibly the safest way to get paid is via wire transfer. The money will only show up if it really exists, the transaction generally cannot be reversed, and there is more of a paper or electronic trail for law enforcement to follow, if necessary. You can also ask for cashier’s checks or money orders—just be aware that thieves routinely use fake documents, so you can run into the same problems you’d have with a bad check.
You might also try newer forms of payment, like apps and online tools. Services like PayPal allow you to receive funds from customers and friends. However, you need to research whether or not those payments can be reversed, and under what circumstances. For example, Venmo scams are popular with online con artists who use the service to get free goods.