Why Is There a Hold on My Checking Account?

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Updated on Wednesday, April 29, 2020

Checking account holds happen so that a bank can make sure there’s enough money to back up a transaction. They can occur for a variety of reasons, such as if collection of the money may be in doubt or if a check looks suspicious in any way.

Holds on checking accounts are common — in fact, they can be inevitable, depending on your bank’s funds availability policy. Rest assured, though, federal regulations ensure you won’t be waiting on your money for eternity.

Why banks put holds on checking deposits

Check holds, or deposit holds, refer to the period of time in which a financial institution holds your deposit before it releases the funds to your account. The reason for check holds is to ensure that there are enough funds available to back up the transaction, and they can be triggered for a myriad of reasons, including:

  • Your history: Check holds can happen if your account is new, or if you’ve overdrawn too many times in the past six months.
  • Large deposits: You can trigger a check hold if you make a deposit over $5,000.
  • How the deposit is made: Check holds can be triggered if you deposit your check at an ATM that is not owned by your bank or credit union.
  • Suspicious activity: Your bank could put a hold on your check if they have reason to believe it’s uncollectible or if they suspect fraud.
  • Errors with the deposit: A check hold might occur if the check was previously deposited but then returned unpaid, if the check was not properly endorsed or if there was incorrect routing or account information on the deposit slip.

Check holds are the reason you might see both an “available balance” and “current balance” on your checking account — the former referring to what funds you can spend immediately, and the latter referring to funds that are still waiting to post and settle.

Holds are designed to not only protect the financial institution, but the consumer as well. For example, if you spend funds before they clear, you can get hit with a returned check fee or a bounced check. Check holds are also a way to weed out fraud or suspicious activity.

How long can checking account holds last?

Your funds can be withheld from you from one day up to 11 days, although in most cases, the hold is lifted within a matter of days. Your financial institution can carve out its own policies regarding check holds, but a federal law dubbed the Expedited Funds Availability Act puts limits on how long banks and credit unions can wait to give you access to your deposits.

The type of deposit also impacts how soon your funds will be available, as shown in the table below. Keep in mind that availability can also fluctuate based on your financial institution and whether you made the deposit in person.

Type of Deposit

Availability

Direct depositDay of deposit
Wire transfersNext business day
First $200 of any check depositedNext business day
CashNext business day
U.S. Treasury checksNext business day
U.S. Postal Service money orders Next business day
State or local government checks Next business day
Cashier’s, certified or teller’s checks Next business day
Federal Reserve Bank and Federal Home Loan Bank checks Next business day

On the flip side, the following types of deposits could trigger longer hold times:

  • A new account or an account overdrawn too many times in the past six months
  • Deposits over $5,000
  • Deposits made at ATMs not owned by your financial institution
  • Checks that your financial institution believes might be uncollectible
  • A check that has previously been returned unpaid and has been redeposited

It’s also worth noting that banks and credit unions can determine the cutoff time that it considers as the end of the business day, therefore impacting the timeline of when your deposit might be made available. However, the business day cutoff time can be no earlier than 2 p.m. at physical locations and no earlier than noon at ATMs.

Financial institutions are required to clearly communicate their hold policies to their customers, and they should provide you with a time frame in which your funds should be available on the deposit receipt that you get after making a deposit. Typically, you can also find a general timetable in the account agreement you received when opening your account.

How to prevent checking account holds

When it comes to preventing checking account holds, much of it is out of your hands and up to the bank’s policy. If you consistently have check holds, though, it may be a good idea to contact your bank to troubleshoot the reason for the triggered check holds. Also, don’t try to write checks or withdraw against the funds that are currently on hold — you could get slapped with fees.

While you can’t necessarily prevent checking account holds, there are moves you can make to receive the funds you deposit sooner:

  • Use direct deposit for your paycheck
  • Opt to make your deposit in-person to a bank employee, rather than at an ATM or through mobile deposit.
  • Deposit large amounts of money via a wire transfer or another form of payment that clears quickly.

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