Unfortunately, it’s a common misconception that banks have to honor a post-dated check. Illinois Legal Aid points out that banks process up to 45 million checks a day, making it impossible to check the dates on each one.
What is a post-dated check?
When you post-date a check, sometimes referred to as post-dating, you write a date on the check that is later than the current date. So, if today’s date is January 1st and you list January 15th on the check, you have post-dated it.
There are a few reasons a post-dated check is used. The issuer may wish to delay payment until he has the funds in his checking account to cover the amount written on the check. On the opposite end, the receiver may allow multiple payments for an item or service, instead of requiring one big lump sum. He or she may request that you provide all of the checks upfront, but have you list future dates on each of the checks, with the exception of the check for the initial down payment, to correspond with your agreed upon payment dates.
Does post-dating a check work?
Most of the time, post-dating a check does not work. Jessica Allen, a financial counselor and former tax advisor, warns that it is important to keep in mind that if you were to post-date a check to a business, that business would more than likely not notice the date and deposit the check upon receipt.
“Post-dating the check does not guarantee that the recipient will adhere to the date,” she told MagnifyMoney.
Additionally, laws governing commercial transactions in the U.S. explicitly allow banks to cash checks when the date on the check is later than the current date. The exception is if you contact your bank with advance notice to tell them you are postdating a check and do not want it cashed until a specific date.
So, if you contact your bank and give them a reasonable amount of notice that you are post-dating a check, they should not cash the check until the date specified on the check. If they do, the code allows for you to seek restitution for any damages that occurred as a result of the check being cashed early. The Consumer Financial Protection Bureau says that an oral notification is good for 14 days, while written notifications are to be honored for as long as six months.
Alternatives to a post-dated check
Set up future bill payments online through the company’s website or your bank’s bill pay service. Many online bill pay platforms allow you to schedule payments for future dates and will not debit your account until that date arrives.
“That way you can control when the funds are actually removed,” Allen says. Most banks and credit unions offer online banking and banking through their mobile apps, making scheduled electronic transfers a breeze.
If you know the payee personally, you can ask him or her to wait until you have the money in your account. Should the payee agree, you can write the check without worry after the necessary funds have been deposited and made available in your account.
Another option is to put a stop payment on the check if you’re worried it won’t clear. A stop payment prevents the check from being cashed and most banks will allow you to request a stop payment through your online account, over the phone or in person at your local bank branch.
Before you request a stop payment, you’ll want to compare fees, as it may not be worth utilizing this option. For example, Navy Federal Credit Union has a stop payment fee of $20, which is $5 more than their returned check fee. BB&T charges $34 for a stop payment, which is almost as much as the $36 returned item fee that you’d be assessed if your check didn’t clear.