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Banking

How Long Does It Take for a Check to Clear?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

How long does it take for a check to clear?
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In our present digital age, waiting for a paper check to clear may seem archaic. With the advent of mobile banking, direct deposit and real-time payment providers, like Venmo and Zelle, some people might feel frustrated by waiting for a check to clear. Yet banking customers do need to wait for paper checks to clear, and with good reason. Let’s take a look at the factors involved for a check to clear, and the reasoning behind them.

What happens when you deposit a check

To understand how long it takes for a check to clear, it helps to know how a check is cycled through the bank payment process:

  • You accept a check and deposit it at your financial institution, either a bank or a credit union.
  • Your financial institution contacts the check-payer’s bank to request the amount of money written on the check.
  • The payer’s bank takes the money from the payer’s account and schedules it for delivery to your bank.
  • The cash is deposited into your bank account.

Understanding check clearance

When you deposit a check at a bank, either with a bank teller or at an ATM, you’ll get a receipt that states when the funds will be available. If the check has not cleared by the date specified, you may contact the bank to find out why.

In general, you can expect most checks to clear the day after you deposit them, as long as you make the deposit on a weekday and during bank business hours. If you deposit a check on a Saturday, Sunday or bank holiday, the bank will treat the deposit as being made on a Monday, the first business day of the week; in which case, the check will usually clear on a Tuesday.

Many banks will credit you with an immediate $100 on a check deposit, as long as the check is written for more than $100, and is deposited with a bank teller or at an ATM.

Why your check might take longer to clear

Your check could take longer than one business day to clear for a number of reasons:

  • Actual check amount. If the check is for a large amount, then a bank may hold the check longer because of the greater risk the bank assumes by accepting it. A bank may hold a $10,000 check for a longer period than a $100 check, for example.
  • Who wrote the check. Banks treat clearing dates differently, depending on who’s writing the check. For example, a U.S. Treasury check, whose funds are guaranteed by the federal government, will clear within one banking day. But a bank may view a personal check differently. Once a bank knows that the check is legitimate, it usually will release payment within five days.
  • Payer’s bank account activity and status. Your bank may hold a check if there are insufficient funds in the payer’s account to cover the amount of the check. Or if the payer’s account is closed or blocked for some reason. In these instances, banks usually return the check to the paying institution, which could result in a longer delay in payment for you.
  • Your own bank activity and status. In general, if you’re a new customer at a bank, you can expect to wait between seven and 10 days for a check to clear. But if you’re a long-time customer with no (or a minimal) record of overdrafts, then your bank likely would clear the check more quickly. Conversely, if you’re a customer with a low account balance or a history of overdrafts, don’t be surprised if your bank takes as long as 10 days to clear a check of $1,500 or more.

There are good reasons for a bank to hold a check before clearing it for payment, but in general most checks are paid within one or two business days of being deposited. Most banks would say that the amount of time a paper check takes to clear is based on the check amount and who’s paying the check.

Check with your financial institution to learn more about its check-clearing policies. You also may find this information on your bank’s website or in your bank account agreement.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brian O
Brian O'Connell |

Brian O'Connell is a writer at MagnifyMoney. You can email Brian here

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Banking

What’s a Postdated Check?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Explaining what a postdated check is
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A postdated check is a check that is written with a future date on it.

  • If it’s Jan. 5 but you write a check with a date of Jan. 25, you are postdating a check.
  • Generally, people do this if they don’t currently have the funds available in their bank account but will have the funds available in the future and don’t want the check to bounce in the meantime.
  • They might also choose to postdate a check if they are paying for something ahead of time before the payment is due or the service has been completed. However, individuals should know that postdating a check is not always worth doing.

This is because once a check is signed, it becomes legal tender. In other words, once you write a check, legally, it can be signed and cashed, regardless of its date. If this happens and you don’t have the funds available in your checking account to cover the check, you could be hit with an overdraft fee. You could also lose credibility with the person to whom you made out the check.

To avoid this from happening, you may be able to notify your bank ahead of time that you don’t want a check cashed until the date you’ve written on it. Some state laws could require a bank or credit union to wait to cash the check if you give reasonable notice. In your notice to your bank, you should provide the name of the payee, your account number, the check number and the amount of the check.

The Consumer Financial Protection Bureau (CFPB) indicates that if you provide written notice to a bank about a postdated check, your request should remain valid for six months. If you provide oral notice, your request should be valid for 14 days. It’s also possible that a bank will require you to pay a fee to process this request.

You might also want to communicate with the person you are writing the check to that you would like them to wait until the date specified. This could help manage their expectations and avoid bouncing a check.

That said, it is always better to avoid writing a postdated check if you can help it. Once you hand over a check to someone, they are generally in control of when it is cashed. A better alternative could be using an online bill pay service through your bank or another financial institution. Consumers can also apply for a loan from a bank or credit union to cover expenses, ask their employer for a pay advance or work out a payment plan with the person they are paying.

It’s also important to keep in mind that it is illegal to intentionally write a bad check. And while a postdated check isn’t in itself illegal, it could be wiser to avoid postdating a check and seeking an alternative way to make your payments.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Renee Morad
Renee Morad |

Renee Morad is a writer at MagnifyMoney. You can email Renee here

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Banking

Understanding a Bank Statement

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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A bank statement is report that a bank or credit union sends out on a fixed date each month or quarter listing account activity from the previous statement period. That includes activities like deposits, withdrawals, interest paid, checks and any charges or fees. A bank statement will also show you your account balance at the time the statement period ended.

A bank statement is a great way to see if there are any inaccuracies in your account. You can also use it to track your finances, such as seeing whether your spending habits are on target.

The 7 key parts of your bank statement

Depending on your bank or credit union, your statement typically includes transaction details and account summary. It may also include how to report inaccurate information. For those who have multiple accounts (including both checking and savings accounts) with the same financial institution, your transactions may be lumped into one statement.

Here’s a sample:

Example of a bank statement

Bank statement usually displays the following information:

  • Bank information. You should see the name of your financial institution at the top, which can also include their contact details like their address and phone number.
  • Statement period. This is the period of time that’s covered by your statement.
  • Account information. This is where you’ll be able to see which account your statement is for, with the account type and number.
  • Account summary/rewards information. If your account offers rewards, such as cash back or points, you may see it listed in a separate section. Your statement could also list a summary of the types of transactions, giving you a total dollar amount for each one.
  • Account balance. You’ll be able to see your start account balance (at the beginning of the statement period) and your ending account balance (the last date of the statement period).
  • Account description. Your statement will list in order transactions that occurred. It’ll also include the amount withdrawn or deposited and brief description which can include the type of transaction and merchant information.
  • Fees. If you incurred any maintenance, overdraft or returned items fees, you may be able to see a summary of those transactions, including ones for the current statement and year to date.

Paper vs. paperless statements

Financial institutions typically give you the option to receive paper or electronic statements. If you’d rather receive paperless statements, you can ask your bank or credit union on how to change your account options.

In many cases, you can simply log into your checking or savings account online and do so in the account settings section. You may also be able to indicate how you want to receive your statements — via email or your bank will send you an alert so you can download whenever you log into your account. Most places will allow you to download a PDF copy of your statement so you can keep it in your files or print them out.

The advantage of going paperless is that it’ll save you from unnecessary clutter. It could also save you money — some banks and credit unions tack on a small fee if you opt to receive paper statements.

However, keeping paper statements also has its advantages. For one, if you don’t have regular access to a computer, having paper statements on file can come in handy. Or if you’re the type who gets overwhelmed by their inbox, getting paper statements can eliminate that and ensure you check your statements each month.

Also, if you’re managing finances for someone else, like an older member of your family, having paper statements can be less of a hassle than electronic statements since to access those documents, you’ll need to find online logins.

How long to keep your bank statements

Unlike tax documents, you don’t need to hold onto your bank statements for years. The general rule of thumb is that you should hold onto bank statements for a year. Of course, it depends on why you need those documents, such as for tax purposes or you’re using it to check your transactions.

Most banks will allow you to access up to a few years’ worth of statements, though check with yours to see what their policy is.

To get rid of paper statements, the safest way to do so is to shred them. Doing so can help prevent the risk of fraud or identity theft if you were to just throw away your pile of sensitive documents. You can either purchase one or go to your nearest office supply store where they can shred and dispose of them.

What to watch out for

With bank statements, make sure you store them in a safe place if you have paper statements or don’t log on to retrieve electronic copies over an open Wi-Fi connection. Doing so can put you at risk of someone stealing your personal information and using it to their advantage. When you review your bank statement, see if all the information is correct. If you have questions or want to report fraudulent activity, contact customer service as soon as possible.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here