When you're trying to make sure you have enough money in the bank, you don't have time to wait a couple of days for a check to clear. But checks can take at least one business day to go through the approval process – sometimes longer. If you deposit a check in person, you'll at least get things going on your end without delay, but check-clearance speed also depends on the banks involved.
Do Bank Checks Clear Immediately?
Although it can vary from one bank to the next, generally speaking, if you deposit a check, you can expect it to take two business days for the funds to become available in your account. However, many banks will clear at least $200 of the deposit amount the next business day to cover any payments that come through. In other words, if you deposit your paycheck on a Monday morning and your electric bill comes through the next day, it probably will go through without a problem.
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If having access to your funds is important to you, though, there are some banks that clear checks faster than others. In most cases, these banks simply bump up the amount of any deposit available to accountholders, so there will still be a limit. Bank of America, for instance, has up to $5,000 of a check available to depositors the next business day, as long as the money is in the account before 2 p.m.
Same-Day Check Clearance
When you're concerned about check clearance, you're probably most worried about something called funds availability. This is the policy most banks have for making your deposited funds available for you to either spend or withdraw. If your account balance has dropped to nearly zero and you want to withhold $100 from your paycheck in cash, the bank will probably want to reduce its own risk by waiting until the check has cleared the payer's account and the funds are officially in your account to let you have any of that money.
There are some credit unions, however, that will offer same-day funds availability as long as you deposit your check during regular business hours. You'll probably have to deposit the money at a branch rather than an ATM to get that benefit, though. If you ask a big financial institution like Chase bank how long for your check to clear, you'll be directed to the deposit agreement, which states that you can access your funds the next business day.
Returned Check After Clearance
But even if you deposit a check in person and you can access the funds that day or the next, that doesn't mean it's officially cleared. The bank can feel safe in authorizing the funds, especially if you have enough money in your account without the check to cover whatever you're spending. A check can bounce days, even weeks, after you've deposited it.
When a check doesn't clear the payer's account, it comes back to your bank marked insufficient funds. Your bank will likely charge a fee for the check, which you can try to collect from the payer. In addition to asking an institution like Chase bank how long it takes for your check to clear, you should also be aware of your bank's bounced check policies.
The biggest problem with a bounced check is that the funds come out of your account. That means if you have bills coming through, you may not have enough money to pay them all, which can quickly put you in a situation where you're accruing penalties for insufficient funds. Those fees can add up quickly, so it's important to avoid bouncing a check.
Speeding Up Check Clearance
Choosing a bank that clears checks quickly is only one step toward getting your money faster. Banks pay attention to the financial habits of accountholders when deciding whether your deposit can be trusted, so the lower risk you are, the better. Having money in the bank is great, but you can also speed things up by being a reliable member who rarely, if ever, bounces checks. This may mean declining to accept a check as payment from parties you don't completely trust.
If you're routinely frustrated by check slowdowns from one source, consider an alternative payment method like automated clearing house or electronic funds transfer. Many banks now have built-in personal pay options, but you can also use something like Venmo or Paypal. If your checks are coming from an employer, setting up ACH on the front end may take a little time, but it will save your employer significant money on check processing fees in the long run.
Same Bank Check Clearance
Regardless of the bank you use, if the person issuing the check banks at the same lender, you will always see a faster transfer. The bank can instantly see whether the payer has the funds and move the money over without risk. If you deposit a check in person, you can even get partial or full cash back.
If you aren't members of the same bank, cashing the check may be a quicker option. Look up the check-cashing policy of the bank that's listed on the check. Some financial institutions will cash checks for nonmembers, and some won't. Be prepared to pay a small fee for the service and take two forms of identification along with you when you visit the branch.
Nonbank Check-Cashing Solutions
Banks that clear checks fast may not agree to cash nonmembers' checks, but there are other options. Walmart and Kmart will cash checks for a small fee, and you can find many other retailers that will transfer the balance of the check to a prepaid debit card. Some of these services even let you deposit the check using a mobile app, which will come in handy if you plan to deposit checks this way on a regular basis.
There are many check-cashing outlets that promise to either cash a check or lend you money that you can pay back once you have your paycheck. These services charge outrageous fees. Avoid any business marketing itself as offering payday loans or cash advances. No matter what service you choose, ask for disclosure of all fees up front.
Post-Dated Check Use
When someone doesn't have enough money in the bank to pay a debt, one workaround people try is dating the check for some time in the future when the funds will be available. The thinking is that the person will hold that check until that date before depositing it. But if the recipient decides to deposit the check anyway, many financial institutions will push it through, clearing the money and charging insufficient funds fees if there isn't enough money in the account to cover it.
Before you write a post-dated check, also known as a stale-dated check, take a look at your terms and conditions. Along with Chase bank's "how long for check to clear" verbiage, the bank clearly states that all post-dated checks submitted for payment may be paid, even if they're written for a later date. They also caution members not to include restrictions like "Void after 180 days" or "Valid for $1,000 or less," stating that they have no duty to honor those requests.