For How Long Can a Bank Keep a Transfer in Limbo?

You can transfer money between bank accounts using a number of different methods including check writing, online transfers or wire transfers. Banks must comply with federal regulations pertaining to deposits and transfers and cannot keep your transfer in limbo indefinitely. However, depending on the method you use to transfer your money the process could take a few minutes or several days.

Paper Transfers

Transfers involving paper checks and deposit slips often take longer to process than other kinds of transactions because of bank cutoff times. Federal banking regulations allow each bank to determine its own end of day cutoff time and the business day at many banks ends at 2 p.m. Transactions conducted after the cutoff time are not processed until close to midnight at the end of the next business day. Therefore, if you write a check after a 2 p.m. cutoff on Friday, to transfer money to your savings, it will not post to your account until late on Monday night. It would take four days for the transfer to post if the Monday fell on a federal holiday.

Electronic Transfers

When you transfer money between your accounts using your online banking or an automated-teller-machine, the transfer usually takes immediate effect. However, banks still need to complete all of the paperwork for the day's transactions in order to balance all of the bank's accounts, which means the bank must stop processing electronic deposits at some point. Therefore, while many banks do not use the regular cutoff time for electronic deposits, you usually have to contend with some kind of cutoff time even if it occurs in the evening after the bank closes for the day. Electronic transfers that are conducted after the cutoff time are not processed until the next business day.

Other Banks

When you transfer money between banks using paper checks, your transfer could take several days to process. Regional federal reserve banks facilitate the transfer of money between banks, and it can take days for your actual paper check to pass through the federal reserve and reach another bank. Banks can legally place two business-day holds on most checks, although checks in excess of $5,000, are often subject to seven business-day holds. If you transfer money into an account that has been open for less than 30 days, the receiving bank can hold the funds for up to nine business days.

Wires

You can transfer money between banks by arranging a wire transfer. In order to do this, you must pay a fee and provide your bank with the account number and the routing number of the destination bank. Wire transfers are processed by the federal reserve, and the reserve stops accepting wired funds after 4 p.m. If you submit a wire request before that time, the transfer normally goes through on the same business day. However, international transfer usually have to pass through an intermediary international bank and typically take two business days to process.

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