Check-clearing holds are not just an annoyance; delayed availability of funds can cause you to overdraw your account and incur fees and penalties. How long it takes for a bank to make your funds available to you depends on what type of check you have and how you deposit it. In some cases, the bank can take weeks to process your check if it has good cause.
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Expedited Funds Availability Act
Banks must make funds available to you based on a time frame in accordance with the Expedited Funds Availability Act of 1987. Checks that pose little risk to the bank, such as Treasury checks, cashiers checks and wire transfers, have next-day availability, according to the Federal Reserve Board. The EFAA allows banks to hold checks from local businesses for up to two days and out-of-state checks and checks deposited through ATM machines for up to five days.
Certain exceptions exist for situations where a bank needs more time than the standard one-, two- or five-day time frame. For example, the bank receives an extended check-clearing period if you are a new customer, attempt to cash more than $5,000 in one day or frequently overdraft on your account. The bank also gets an extension for technical glitches or situations in which the bank has reason to believe it cannot collect on the check. The EFAA does not give a specific time frame for these exceptions, only that the bank must make the funds available in a "reasonable amount of time."
When calculating the time available to a bank to cash your check, "day" refers to a business day. In the United States, Saturday and Sunday do not count as business days. Also, banks can set their own cutoff hours -- usually 2 p.m. If you deposit a Treasury check at 3 p.m. Friday, for example, the bank does not need to make your funds available until Tuesday. If you deposit a check before 2 p.m., the bank must make your funds available on Monday.
In general, a bank does not need to tell when it will make your funds available unless it uses an exception to the EFAA. If the law requires the bank to give you notice, it must tell you why it needs extra time to process your check and when it will make your funds available. No section in the EFAA applies to foreign checks. If you want your money as fast as possible, use direct deposit or send money using wire transfer. Sometimes, banks shorten holds for preferred customers by request.