Deposit accounts are essential tools for managing and spending your money, but there are times when not all of your money is available to spend. What you’ll notice is that your “available” balance is lower than the full balance of your account because your financial institution has placed a hold on a deposit.
There’s good reason why your bank or credit union is permitted to put your funds on hold. Quite simply, your financial institution wants to ensure there won’t be problems with your deposit — in other words, that the check you deposited won’t bounce — before letting you spend the money.
The good news is federal regulation limits the time your financial institution can hold your funds. And even though all national banks and federally chartered credit unions are subject to the same hold rules, each institution can release your funds sooner at its discretion.
By understanding the rules of funds availability, you can ensure you’ll have access to your money when you need it. Read on to learn more.
Funds Availability Policy by Deposit Type
Federal Regulation CC governs how long you can be made to wait before drawing funds against your account based on the timing, the type (e.g., cash, check, direct deposit) and, in certain cases, the amount of the deposit. Generally, a bank or credit union has until at least the next business day to make most deposits available but can make them available sooner if it wishes.
The table below displays the availability of each deposit type, according to the deposit method used. It assumes deposits were made into the payee’s account; when you deposit a check made out to someone else, there will generally be a longer hold on the funds.
| Deposit Type | Deposit Method | Funds Availability |
|---|---|---|
| Cash | In Person to an Employee | Same or Next Business Day |
| At an On-Premises ATM or Night Depository | 2nd Business Day | |
| At a Nonproprietary or Non-Network ATM | 5th Business Day | |
| Info | ||
| Electronic Payments:
-Wire Transfer -ACH Deposit -Direct Deposit |
Electronic Deposit/Transfer (Payment Received Same Day) | Same or Next Business Day |
| Electronic Deposit/Transfer (Payment Received Later) | 2nd Business Day | |
| Info | ||
| Nongovernment Checks:
-Cashier's Check -Certified Check -Teller's Check |
In Person to an Employee | Next Business Day |
| At an On-Premises ATM or Night Depository | 2nd Business Day | |
| At a Nonproprietary or Non-Network ATM | 5th Business Day | |
| Info | ||
| Government Checks:
-U.S. Treasury Check -U.S. Postal Service Money Order -State/Local Government Check -Federal Reserve Bank/Federal Home Loan Bank Check |
In Person to an Employee | Next Business Day (For State/Local Gov't. Checks: Payor and Receiving Financial Institution Must Be in the Same State) |
| At an On-Premises ATM or Night Depository | 2nd Business Day (Except U.S. Treasury Checks: Available Next Day) | |
| At a Nonproprietary or Non-Network ATM | 5th Business Day | |
| Info | ||
| "On Us" Checks (Drawn Against an Account at the Same Institution) | In Person to an Employee | Same or Next Business Day (Both Branches Must Be in the Same State) |
| At an On-Premises ATM or Night Depository | Next Business Day (Both Branches Must Be in the Same State) | |
| At a Nonproprietary or Non-Network ATM | 5th Business Day | |
| Info | ||
| Non-Next-Day/Regular Checks for Less than $200 | In Person to an Employee | Next Business Day |
| At an On-Premises ATM or Night Depository | Next Business Day | |
| At a Nonproprietary or Non-Network ATM | 5th Business Day | |
| Info | ||
| Non-Next-Day/Regular Checks for More than $200 | In Person to an Employee | First $200 Next Business Day, Remainder 2nd Business Day |
| At an On-Premises ATM or Night Depository | First $200 Next Business Day, Remainder 2nd Business Day | |
| At a Nonproprietary or Non-Network ATM | 5th Business Day | |
| Info | ||
| Checks Deposited via Mobile Remote Deposit Capture (mRDC) | Mobile App/Remote Scan (Free or Paid Service) | Generally, Next or 2nd Business Day |
| Mobile App/Remote Scan (for a Fee, at Some Institutions) | Immediately | |
| Mobile App/Remote Scan (for Free, at Some Institutions) | Immediately | |
If you deposit into an account that doesn’t belong to the payee, it will be treated like a regular, or “non-next-day,” check deposit.
The cut-off time for the end of a business day can be no earlier than 2 p.m. at physical branch locations and no earlier than noon at an ATM or elsewhere. For mobile deposits, the cut-off time is often later (e.g., 5 p.m. local time). If a bank or credit union is open for business on Saturday or Sunday, it is not required to consider those business days for the purpose of funds availability.
Longer Holds on Deposits
Regulation CC provides six exceptions to the hold periods for deposited checks. These exceptions allow financial institutions to extend the maximum hold period for a “reasonable” period of time — generally one to five additional business days, depending on the type of exception. In any case, your financial institution must be able to prove that the additional time is warranted and notify you in writing why it must hold your check (except when deposits to a new account are held).
A summary of the exceptions to the maximum hold rules is included in the following chart.
| Exception | Description | Funds Availability |
|---|---|---|
| New Account | Deposit into an account that has been open for fewer than 30 days (unless you've had another account with the same institution for at least 30 days) | Cash, Electronic Payments & First $5,000 of Checks Next Day; Remainder 9th Business Day |
| Large Deposit* | Deposit other than cash or electronic payment totaling more than $5,000 in a single day | First $5,000 2nd Business Day; Remainder 7th Business Day or Later |
| Redeposited Check** | Check that was previously deposited and returned unpaid because it was post-dated or missing an endorsement | 7th Business Day or Later |
| Repeated Overdraft*** | Account has been overdrawn for 6+ business days in the previous 6 months or for 2+ business days by $5,000+ in the previous 6 months | 7th Business Day or Later |
| Potentially Uncollectable Check | Check that may not clear because it may be fraudulent; it is post- or stale-dated; a stop payment was issued; or your account balance cannot cover the check if it returns unpaid | 7th Business Day or Later |
| Emergency Conditions | Deposit made during natural disasters, computer failures, power outages, communications malfunctions, wars or other uncontrollable situations | When Conditions Permit |
*This rule can apply to a combination of your deposits into multiple accounts, even if you are not the sole owner of those accounts.
**If the check was redeposited after the issue had already been corrected, a longer hold cannot apply.
***An account may also be considered overdrawn if the negative balances would have occurred had checks and other charges been paid on your behalf.
Tips
Understanding funds availability rules can help you avoid overdrafts and other complications when your deposits are unexpectedly tied up. But there are other important considerations to keep in mind:
- Ask Questions When You Deposit: If you’re making a deposit in person, you can ask when your funds will be available. If depositing by other means, your online statement will show your available balance and may also show when any held funds will be available. You can also call your bank or credit union and ask about your deposit.
- Request Early Release: If there is a reason a check is unlikely to bounce, you can request an early release of your money. An example would be a payroll or reimbursement check from your employer.
- File a Complaint: Any time a bank or credit union delays availability of your funds or deems a check “uncollectable,” it must notify you of the reason in writing. If your financial institution is a national bank and has exceeded the allowable hold period on your deposit, you can file a written complaint with the Office of the Comptroller of Currency. For federal credit unions, you can file a complaint with the National Credit Union Administration. For all other institutions, you can submit a complaint to the appropriate regulator.
- Beware of Check Fraud: Fraudulent and counterfeit checks are still common, which is why financial institutions are holding the funds on some checks much longer than they once did. Keep in mind that funds can be released to you before a check has “cleared.” If the check was fraudulent and you’ve already spent the funds, you may be liable for the funds in addition to overdraft and other expensive fees.
As a general rule of thumb, you should avoid accepting checks from suspicious sources. The federal government will protect your deposits in the unlikely event that your bank or credit union fails. Your financial institution will also protect your funds if it experiences a burglary or natural disaster. You’re accountable for your own deposits otherwise.
Image: Wichy/Shutterstock
