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.