A friend was complaining to me that her bank holds her checks "too long," and wondered if she would be happier with another bank. I don't know the complete answer for her, so I pointed her to the Funds Availability Policy of her current bank, and suggested that she check with the policies for the banks she was considering. She didn't even know that such policies existed, and my impressed is that she thought the bank was just randomly holding her deposits.
Every financial institution has a written statement of their official policies for the availability of funds deposited with the bank or credit union. You received them when you opened the account, and they are available online. In addition, these policies are governed by federal law. Generally speaking, your bank or credit union may choose to make your funds available more quickly than federal law requires, but it may not delay the availability of funds beyond the limits of the federal law. However, there are exceptions where your financial institution may choose to hold funds for a longer period of time. If your bank chooses to hold funds beyond the usual limits, they must notify you at the time you make the deposit.
The availability of funds will vary by deposit type and the method of deposit. For example, deposits made "not in person" may require an additional day or two for processing. "Not in person" deposits would include those made at Automated Teller Machines (ATMs), via mobile deposit applications, via scan, mailed deposits, and deposits made at any third-party locations.
Under federal law, "in person" deposits will be available on the day following the deposit:
- Cash deposited in person to a bank employee.
- Electronic payments (wire transfers or ACH credits) are considered received (deposited) when the bank or credit union has received both payment in collected funds and information on the account and the amount to be credited.
- U.S. Treasury checks deposited in person or at an ATM owned by your bank or credit union and made payable to an account holder.
U.S. Postal Service money orders deposited in person and made payable to an account holder. - Federal Reserve Bank and Federal Home Loan Bank checks deposited in person to an employee (not an ATM) and made payable to an account holder.
- State or local government checks deposited in person and made payable to an account holder, if your institution is in the same state as the payor of the check.
- Cashier's, certified, or teller's checks deposited in person and made payable to an account holder.
- Checks drawn on an account held by your institution ("on-us checks") deposited in person or at on-premises ATMs or night depositories.
- The first $200 of a non-"next-day" check(s).
There are many situations where funds may be held for longer, including:
- larger checks,
- checks deposited in ways other than "in person,"
- redeposits of checks that have been previously returned as non-sufficient funds,
- deposits into new accounts, and
- deposits to accounts that have been repeatedly overdrawn.
If you have any questions about your financial institutions funds availability policies, ask for a copy of the policies, find it online, or look for it posted in your local branch. It's frustrating to figure out the rules when you don't even know what they are!
