There’s nothing like the feeling of a check hitting your bank account – until, of course, you notice the funds are marked “pending.”
What does check hold pending mean, you ask? Well, in a process known as a check hold, banks are legally entitled to a few days to hold your check before they clear the transaction and make the money available to you.
Fortunately, Federal Reserve regulations limit how long a financial institution can hold a check before releasing the funds to the account owner. In most cases, checks are held for less than a week. Most check holds are only one or two business days long.1
However, under certain circumstances, like depositing a large check, the funds may be held for as long as seven business days. Here’s what you need to know.
How do check holds work?
A check hold occurs after a check has been deposited but before it’s cleared. The bank needs time to ensure the check is legitimate before disbursing the funds to the account holder.2
However, because check holds can be inconvenient for consumers – cue account holders asking, with good reason, “Why is the bank holding my check?” – federal regulations are in place to ensure these holds don’t last too long.
The Expedited Funds Availability Act of 1987 and the Check Clearing for the 21st Century Act of 2003 help ensure faster processing times for financial institutions and their customers.3 According to these rules, local checks (i.e., those from a bank anywhere in the U.S.) should be available on the second business day after they’re deposited, and non-local checks should be available on the fifth.1
Some good news? In most cases, banks usually have to make the first $225 of your check available for spending and withdrawal by the start of the business day following the deposit.4
Larger checks, however, may be subject to longer hold periods – though again, laws mandate that the first $5,525 of the check must follow usual hold times.5 The remainder may be held for up to seven business days.6
7 reasons for banks holding checks
While all check holds usually have to do with the verification and clearing process, some more specific factors could cause your check to be held for longer.
1. Check verification
Check fraud is a real problem – in fact, banks filed more than 680,000 reports related to potential check fraud in 2022 alone.7
One of the primary reasons banks hold checks is to validate them and ensure they’re authentic and legitimate. They must ensure that the account from which the check is written has enough funds to clear the transaction (i.e., it’s not an instance of check kiting).
2. New account
If you have a brand-new account, your checks may be subject to longer holds at first. During the first 30 days after you open the account, when the bank is still verifying your identity, you may find your checks “pending” for several days.8
If you write a check that bounces, you may be able to redeposit it – but the bank may place an additional hold on it. This is in part to ensure that the funds will be available in the initiating account so the check doesn’t bounce again.9
4. Large check
Banks can place additional holds on larger checks above $5,525. In these instances, your financial institution may hold the remainder of the check for up to seven days to ensure the transaction is valid and legal.
5. Banking history
Like your credit history, consumer reporting bureaus like ChexSystems, Telecheck, and Early Warning can record your banking history. If you have a history of bounced checks or account overdrafts, your deposits may be subject to longer hold periods to give the bank more time to ensure their validity.
6. Suspected fraud
If the bank has any other reason to suspect fraudulent activity in your account or with the check itself – for instance, if it looks like the writing on the check has been changed by the recipient – it can place an additional hold on the deposit.
7. Emergency funds
Suppose you’ve been issued emergency funds from a government or aid organization. In that case, the funds may still be subject to a hold, especially if you deposit them using an ATM or remotely.
Fortunately, if you deposit your check in person at the bank, the funds should be available the following business day if it’s from the government. If you use mobile deposit or an ATM for these types of checks, the funds should be available within two business days.10
Can I access part of my check funds during a hold?
Short answer: Usually, yes! Thanks to the Federal Reserve regulations, at least $225 of your check should be made available to you the following business day after it’s deposited, so long as the check is from a local bank. You should be able to withdraw the amount in cash or write a check for that amount.
However, in the situations outlined above, the bank has the right to extend its hold on the check, including the first $225.4 To help ensure your check clears as quickly as possible, deposit it in person if you can, and be sure to endorse the check by signing it in the proper location on the back.
Check holds may be inconvenient, but they keep consumers safe
No one likes to see that the check they’ve just deposited isn’t ready to be spent. But check holds can help protect consumers from fraudulent transactions and penalties if the check bounces.
Want to know more about the magic of mobile check depositing? We’ve written a whole guide to show you how to use Chime mobile check deposit.