Checking account holds happen so that a bank can make sure thereâ€™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 â€” in fact, they can be inevitable, depending on your bankâ€™s funds availability policy. Rest assured, though, federal regulations ensure you wonâ€™t be waiting on your money for eternity.
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:
Check holds are the reason you might see both an â€śavailable balanceâ€ť and â€ścurrent balanceâ€ť on your checking account â€” 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.
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
|Direct deposit||Day of deposit|
|Wire transfers||Next business day|
|First $200 of any check deposited||Next business day|
|Cash||Next business day|
|U.S. Treasury checks||Next business day|
|U.S. Postal Service money orders||Next business day|
|State or local government checks||Next business day|
|Cashierâ€™s, certified or tellerâ€™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:
Itâ€™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.
When it comes to preventing checking account holds, much of it is out of your hands and up to the bankâ€™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, donâ€™t try to write checks or withdraw against the funds that are currently on hold â€” you could get slapped with fees.
While you canâ€™t necessarily prevent checking account holds, there are moves you can make to receive the funds you deposit sooner: