Writing and Cashing Postdated Checks
This check writing hack often doesn't work the way you might think
A postdated check offers the promise of controlling the uncontrollable: As time marches forward, you may wonder what the date on a check really does. Whether you received a postdated check or you’re thinking of writing one, it’s important to know how they work — and that they often don’t work the way you might expect.
What a Postdated Check Is
A postdated check is a check with a future date written on it. For example, assume that today is January 1st and you’re writing a check. In general, you’d put the current date (January 1st) on the check. But you could just as easily write next week’s date on the check and say you wrote it January 8th. In other words, you could postdate the check.
People usually postdate checks when they want the recipient (the person or business receiving the payment, also known as the payee) to wait before depositing the check. Two potential reasons for this include:
- The check writer does not have sufficient funds available when writing the check, but those funds will be available on the future date.
- The check writer is paying for something ahead of time — before the payment is due or the service has been completed, for example.
Writing a Postdated Check
- No fraud allowed: There’s no law making postdated checks illegal. It is illegal to write a check when you know you don’t have the funds to cover it, but things get a little fuzzy — and details depend on state law — when you postdate a check (assuming it is accepted as payment). It’s also illegal to defraud somebody who sells you something by pretending to pay but never actually paying (or having the intention to do so).
- Not a written agreement: Just because it's legal doesn't mean things will work out the way you intended. The date that you choose to use is not part of a legally binding agreement between you and the person you wrote the check to. In most cases, the recipient can deposit the check at any time. Unless you set things up correctly with your bank, the bank is free to pay funds out of your account before the date shown on your check.
- Ask first: What’s more, a postdated check might not be an acceptable form of payment. You’re allowed to try to pay with a postdated check, and businesses are allowed to reject those payments because you haven’t really made a free-and-clear payment. If you plan to write a postdated check, ask for permission before doing so. If your payment is rejected, you might be unable to buy a product or service that you wanted, you might have to pay late-payment fees, or there might be other consequences. For example, the IRS generally doesn’t accept postdated checks, so you may face tax penalties and interest if your payment fails. Likewise, some universities won’t accept those checks, so complications with enrollment (among other things) are a possibility.
Cashing a Postdated Check Before the Date Shown
In most cases, you can deposit or cash a postdated check early. Debt collectors and other businesses may be prohibited from processing a check before the date on the check, but most individuals are free to take postdated checks to the bank immediately. That said, if you agreed to wait before cashing a check, it might be illegal to do otherwise.
It’s wise to communicate with whoever wrote the check — there’s probably a reason it’s postdated. If the account does not have sufficient funds, the check might bounce, and you might have to pay fees to your bank. You can try to get those fees reimbursed by the check writer, but collecting from somebody who’s already low on funds can be time-consuming and expensive (possibly requiring that you take legal action). Find out if the check was intentionally postdated, and figure out a solution.
Banks (in the U.S. at least) typically pay on postdated checks unless the checking account owner took particular steps instructing them not to. However, most people don’t do this, in part because banks charge additional fees to monitor the account and prevent payment before the specified date.
Cashing a postdated check might be a challenge. Because there’s a possibility that the check won’t clear, you might have better luck depositing those checks. That allows your bank to place a hold on the funds instead of handing over cash immediately. If you really want to cash a postdated check for the full amount, take it to the bank that issued the check — where the check writer has a checking account.
In some cases, postdated checks get deposited, and nobody ever notices (they don’t look closely at the date). Unless there’s a problem or complaint, those checks are processed and forgotten about.
How to Postdate a Check
To postdate a check, use a future date on the check’s dateline.
- Communicate with your payee about your needs and expectations for when the check can be deposited.
- Ask your bank about requirements and fees for postdating a check.
- Start writing the check just like any other check.
- Write a date for the future on the dateline.
- Sign and submit the check.
- Confirm with your bank: Just writing a future date doesn’t guarantee anything. To really prevent the funds from being paid out of your account before the date you choose, contact your bank before you write the check. Ask what you need to do to ensure that the check is not processed before you’re ready — especially if you don’t trust the payee. Typically, you’ll have to provide written instructions, and your bank can tell you exactly how to do that. Ask about any fees involved, and expect to pay $30 or so.
- Submit a written request: To formalize your request, you may need to provide written instructions to your bank. The requirements depend on your state and your bank, so learn the rules before you write a postdated check. Oral instructions might be valid for 14 days, and you may be able to extend your bank’s monitoring time for up to six months with written instructions.
- Communication saves money: It’s also a good idea to communicate with whoever you give the check to. Make sure they know that the check is postdated, and verify that this is acceptable. If they deposit the check early and it bounces, your bank will charge you an insufficient funds fee (or overdraft charges, depending on your account). The payee’s bank will also charge fees, and you might be required to pay fees or other penalties for paying with a bad check (late fees are also a possibility if your payment isn’t processed on time).
- Who pays if there’s a problem? A rejected payment (or an unexpected withdrawal from your checking account) can cause numerous problems. If you provide instructions to your bank and they pay funds from your account, your bank should be required to cover any overdraft charges that result, and you may have further recourse against your bank for other expenses you face.
Alternatives to Postdating Checks
If you have the option, it is best to avoid writing postdated checks. The only way to guarantee that they’ll actually work is to pay extra fees to your bank. If you’re unwilling or unable to pay your bank to monitor your account, you’re at the mercy of whoever you give the check to. Even if your payee is honest, they may make the honest mistake of forgetting (and leaving you with bad check fees).
Usually postdated are used because you’re short on money — and that’s exactly when you can’t afford extra fees. Instead of writing a postdated check, try the following:
- If you’re postdating a check for timing or convenience reasons (like you’ll be out of town and unable to pay when you usually do), schedule the payment through your bank’s online bill payment service.
- If you need a few extra days for funds to clear in your account, ask your payee for an alternate payment date. Some billers are happy to arrange a payment date that works well with your income (they’ll make your due date a few days after your direct deposit typically comes in).
- Sign up for automatic electronic payments — but only if you trust the payee. Dishonest or disorganized businesses may make withdrawals from your account before you’re ready.