Banking - Check Clearing Policies: In State Check Holds Explained

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Discussion Overview

The thread discusses participants' experiences and concerns regarding check clearing policies, particularly the holds placed on in-state checks by various banks. Participants share their personal experiences with check deposits, holds, and the impact on their financial planning.

Discussion Character

  • Anecdotal
  • Opinion-based
  • Exploratory

Main Points Raised

  • One participant, identifying as a consultant, expresses surprise at their bank's 5-day hold on an in-state check, contrasting it with their previous experiences of shorter holds.
  • Another participant mentions that they generally cash checks instead of depositing them, noting that holds are rarely more than a day when they do deposit.
  • Several users mention that the duration of holds can vary significantly between banks, with some banks not placing holds at all.
  • One participant shares their experience of previously being at a bank that placed holds on checks, including paychecks, and learned to cash checks first to avoid holds.
  • Another participant, who works for a bank, explains that holds are often placed to protect against bad checks and that policies can vary based on the bank's assessment of local versus non-local checks.
  • One participant notes that their credit union does not place holds on checks, although they do not accept third-party checks.
  • Another participant expresses concern about how these holds could affect their ability to process payments for Pampered Chef orders, especially with upcoming shows.

Areas of Agreement / Disagreement

Views differ regarding the appropriateness and duration of check holds, with some participants expressing frustration over longer holds while others seem to accept them as a necessary precaution. No clear consensus emerges on the best approach to handling check deposits.

Contextual Notes

Participants share experiences primarily related to banking practices in New York, with some referencing changes in policies due to increased check fraud concerns. The discussion reflects a mix of personal anecdotes and insights into banking operations.

Who May Find This Useful

Consultants and community members who frequently deal with check deposits and are concerned about the implications of bank policies on their business operations may find this discussion relevant.

KellyRedHead
KellyRedHead
Messages
634
I was just wondering how long your bank puts a hold on checks.
My Credit Union never but a hold on check until Feb. Really surprised they didn't before, they did for out of state, but not for very long.
So today I go to deposit an in state check, but not local and they want to put a 5 day business hold on it!! Won't clear until 3/17! I figured three days, not 5! I need this show to go in by the 15th, so I thought I was safe depositing it today.
If I thought it would be this long I would have asked her for a debit card, which actually I did, but she didn't want to do that and sent me a check.

So just wondering how long you have to wait for an in state check to clear??

Kelly V.
 
I generally cash checks instead of depositing but when I do deposit, they rarely hold them more than a day.
 
  • Thread starter
  • #3
I could have cashed it, but then they would have put a hold on my account for 5 days.
I just don't know why or even how they can hold a in state check for 5 business days.
I am going to call in the morning and see if I can talk with someone.

Kelly V.
 
It really does depend on the bank. I don't think my bank puts any hold on the check. If they do, it's not for more than a day or two (because, I've never noticed).

However, we used to be at a bank that did put holds on check - including paychecks! So, we learned (from a teller at that bank), to cash the check first, then deposit the cash.

Don't worry to much about the extra hold days, though. PC doesn't debit your account until the order is shipped, and since that takes a couple of days in itself, you'll have plenty of time.
 
Do you have a branch of that bank any where near you? If so I would take it there and cash it.
 
  • Thread starter
  • #6
No I don't. We use to have one about 1/2 hour from me, but it closed.
So I thought I was safe depositing it with it being within the state.
I probably will be okay and it won't go out of my account before the 17th. I hope!
But I worry about other deposits I need to make in the future. Like I said I don't mind a couple of days hold, but 5! They never use to do this but a teller told me they have started because they had a lot of check fraud last year.
But my husband said in this electronic day and age, that check should not be held for 5 days! Maybe he is wrong I don't know, but I know I will be calling in the morning, I would have asked when I deposited it, but I was in a hurry and in the drive thru.

Kelly V.
 
Kelly, let us know what you find out tomorrow. If one bank is starting this, others might soon follow, so it would be good to know how to handle the situation.
 
  • Thread starter
  • #8
Yes, I will let you know. I think I am also going to call around to other banks in my area to see what they are doing also.
May move my account for PC, or may not if they all will be doing this soon.

Will let you know!
Kelly V.
 
This really surprises me since recently the banks have this littlel system where they can "electronically" access monies between banks and transfer it faster. This 5-day hold just does not make sense! We used to be able to figure it would take 5-7 days for a check to clear once we wrote it. Now it's like 1 or 2 and it's done. Crazy. This bank is going back in time!
 
Ok don't bash me but I work for a bank, so I'm going to explain the reason behind this. Kelly where in NY are you? The bank I work for does hold certain checks for 5 business days. They are checks we consider to be non local. Local checks are held for 2 business days. If we recieve unfamiliar paychecks we may put a hold on it, but most paychecks are not held. The reason for the 5 business day hold is to protect you and the bank. If the check were to come back bad it hurts all involved. Honestly the holds usually drop off before the check actually clears the other bank. So it's not a fool proof system. My bank actually in the past year or so has actually billed more checks to be considered local, ie 2 business days vs. 5. We will often put a 2 day hold on checks that are actually drawn out of state but have a routing number we consider local. This is due to the electronic quicker processing. There is one "local" bank in my area that has an out of state routing number. This bank actually bought some of our branches in a different area of state and is now popping up in Albany area. If someone brings in that check we have to put a 5 day hold on it because the routing number is not considered a local check. I know it's confusing but your bank should explain it. Also if they have changed their policy they should have sent all account holders notification of this. Also one last thing, the reason banks need to put holds on other banks checks is because we have no way of accessing another banks account information. And actually the whole idea of cashing then depositing to avoid a hold, doesn't work in your bank. Your account will still have that hold on it. If you cash the check at the bank it's drawn on and then deposit cash that is your safest bet. HTH. And sorry so long but was trying to help everyone understand check holds.
 
I bank at a credit union and don't have a hold on my checks. They don't accept third party checks at all though, but I get around this by depositing at an ATM at a different bank which does accept them.
 
  • Thread starter
  • #12
Thank you Katie for going over this with me.
I live in Central NY and they did notify us of bank holds, but I don't remember they saying anything about a in state check taking 5 business days. I remember 2 day holdsbeing mentioned.
I am going to still call this morning and find out how or why this happens.

Rhonda- I bank at a credit union too. This is one reason why I liked my credit union. They never did anything like this before. But like the teller said about the check fraud, many people I guess are doing things they never have done before and they have to be careful, but 5 days still seems like a long time to me in this electronic time we live in. But like Katie mentioned maybe it will be released before the 5 days, I just wondered how this will effect us when doing shows at the end of the month and wanting it in by the 31st for commission. If a hosts gives us her debit card and deposited the checks from her guests into her account, and keeps a minium balance in that acct, there could be a hold on those checks and then the debit card payment will no go through for PC.
I know PC "usually" does not take anything out for 2-3 days after shipping, but it could happen sooner, and there could be a hold for 5 days like I have above.


Will let you know what I find out-

Kelly V.
 

Frequently Asked Questions

What is a check hold?

A check hold is a policy that banks use to delay the availability of funds from a deposited check. This means that even though the check has been deposited, the funds may not be accessible for withdrawal or use until the hold period has expired.

Why do banks place holds on checks?

Banks place holds on checks to ensure that the funds are valid and that the check will clear. This helps prevent fraud and protects both the bank and the account holder from potential losses due to bounced checks.

How long can a check hold last?

The duration of a check hold can vary depending on several factors, including the type of check, the amount, and the bank's policies. Typically, holds can last from one to several business days, with larger checks or checks from out-of-state often having longer hold periods.

Are there different hold policies for in-state and out-of-state checks?

Yes, many banks have different hold policies for in-state and out-of-state checks. In-state checks may have shorter hold periods because they are more likely to clear quickly, while out-of-state checks may be subject to longer holds due to the additional time required for processing.

Can I access funds from a check before the hold period ends?

Generally, you cannot access the funds from a check until the hold period has expired. However, some banks may offer options for early access to funds through specific programs or services, but this often comes with additional fees or requirements.

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