It can be frustrating to deposit money into your bank account only to find out that you can't access it. Banks and credit unions have funds availability policies that dictate when a deposit to your account is available. Knowing and understanding these policies can help reduce frustration and assist you in managing your finances.
Understanding Funds Availability Policies
When a deposit is made to a bank account, the bank needs to verify that the deposit is genuine. In some cases, this happens automatically when a deposit is made through electronic means, such as ACH direct deposits, wire transfers or a peer-to-peer transfer. Deposits of cash, checks or money orders are a different matter. While a bank teller can verify a cash deposit made at the teller window, cash deposits made at an ATM may require further verification.
The same holds true for checks and money orders. Your bank wants to ensure that they are legitimate and not forgeries. In the case of personal or business checks, your bank also needs to ensure that they won't bounce.
As Forbes.com notes, funds availability policies protect both you and your bank. You are responsible for overdrafts on your account, even if the overdraft is the result of a bounced or fraudulent check.
Review Your Bank's Policy
According to the Federal Reserve, all banks are required to create a funds availability policy that is consistent with federal guidelines that are specified in Regulation CC. The policy needs to be made available to account holders. Federal regulations generally require banks to release funds as soon as possible, usually on the second or fifth day following a deposit, depending on the type of check. In addition, some banks may allow you to draw a portion of the deposit as a courtesy prior to the check clearing. Chase, for example, allows bank customers to access up to $225 of most deposits immediately after the deposits are made.
It should be noted, however, that there are factors that could delay, or appear to delay, the release of a bank hold:
Day of deposit: Guidelines for the availability of deposits are based on business days. Business days are Monday through Friday and do not include federal holidays.
Time of deposit: Banks can set cut-off times for deposits. If you do not get the deposit to the bank before that cut-off time, the deposit is considered to have been made on the next business day.
Previous history: Regulation CC allows banks to hold funds for longer periods of time if you have a history of overdrafts, you have attempted to deposit this check once before and it bounced, you have deposited a high dollar amount of checks in one day or if the bank has good reason to believe that the check is not valid. Still, your bank's policy should clearly state how long an extended hold will be.
Contact Your Bank
Once you understand your bank's policy, review your deposit: If it conforms to your bank's policy, it is wise to contact the bank and ask them to release the hold or provide an explanation for the delay. When you call the bank, make sure you have your deposit information handy so that you can describe what is happening to the customer service representative.
If calling doesn't work, consider making an appointment to visit a local branch. A bank manager may be able to clarify the situation for you. If your bank still will not release funds and you do not believe that they are following appropriate policy, it is possible to file a complaint with the Office of the Comptroller of the Currency or local regulatory authority, according to HelpWithMyBank.gov.
Determining whether the hold is appropriate can be tricky, particularly since it's easy to get confused regarding business day and cut-off time policies. Before assuming that the bank has made an error, check to see when the deposit was credited to your account and count the hold from that date.
- Forbes.com: Funds Availability And Your Bank Account: What You Need To Know
- U.S. News & World Report:Check Holds: What You Need to Know
- HelpWithMyBank.gov:Bank Accounts: Funds Availability
- FederalReserve.com: Regulation CC (Availability of Funds and Collection of Checks)
- Chase: Deposit Account Agreement and Privacy Notice