When Will My Large Deposit Be Available?

When you deposit a large sum of money into your bank account, you may not be able to access the funds immediately. This is because banks often place holds on large deposits to protect themselves from various risks.

Reasons for Holding Large Deposits

Banks hold large deposits for several reasons. including:

Verifying the check: Banks may hold checks to ensure they are legitimate and the payer has sufficient funds to cover the amount.
Preventing fraud: Holding large deposits can help prevent fraudulent activity, as it gives the bank time to investigate any suspicious transactions.
Protecting against overdrafts: Holding large deposits can prevent account holders from overdrawing their accounts, which can lead to costly fees and penalties.
Mitigating risk: Banks may hold large deposits to manage their overall risk exposure, especially if the deposit is from an unfamiliar source or involves a large sum of money.

Understanding Funds Availability

Federal regulations dictate the availability of deposited funds, known as Regulation CC. According to these regulations:

For checks under $5,525: Banks must make the first $5,525 available on the next business day following the deposit.
For checks over $5,525: Banks can place a hold on the amount exceeding $5,525 for a “reasonable period of time,” typically up to five additional business days.
For electronic or cash deposits: These are generally available by the next business day after the deposit.

Exceptions to Availability Rules

Banks may extend the hold period beyond the standard five business days under certain circumstances, including:

Large-check exception: For checks exceeding $5,525, banks can extend the hold for a reasonable period, typically up to five additional business days.
New account exception: Banks may place longer holds on deposits made to newly opened accounts.
Re-deposited checks: If a check is deposited and returned for insufficient funds, then re-deposited, the bank may place a longer hold on the re-deposit.
Reason to believe the check is fraudulent: If the bank suspects the check is fraudulent, they may hold it for an extended period to investigate.

How Long Will My Large Deposit Be Held?

The specific hold period for your large deposit will depend on several factors, including:

The amount of the deposit: Larger deposits are more likely to be held for longer periods.
The type of deposit: Checks are more likely to be held than electronic or cash deposits.
Your banking history: If you have a history of bounced checks or overdrafts, your bank may be more likely to hold your deposits.
The bank’s policies: Different banks have different policies regarding hold periods.

Tips for Avoiding Holds on Large Deposits

To avoid delays in accessing your funds, consider these tips:

Deposit checks early in the day: This gives the bank more time to process the check and verify the funds.
Use electronic or cash deposits: These are generally available more quickly than checks.
Maintain a good banking history: Avoid overdrafts and bounced checks to build trust with your bank.
Inquire about the bank’s hold policy: Ask your bank about their specific policies regarding hold periods for large deposits.
Consider using a different bank: If your current bank has strict hold policies, you may want to consider switching to a bank with more lenient policies.

While it can be frustrating to have your funds held by the bank it’s important to understand the reasons behind these holds. Banks are simply trying to protect themselves from risk and ensure the integrity of their financial systems. By understanding the factors that influence hold periods and taking steps to avoid them, you can minimize the inconvenience and access your funds more quickly.

What Is a Check Hold?

The longest period of time a bank is permitted to lawfully retain the proceeds from a deposited check is known as a “check hold.” After the check hold period has passed, the bank must credit the funds to the depositor’s account.

Generally speaking, the check holding period is the same as the number of days the check takes to clear the bank clearing cycle.

Prior to crediting a customer’s account, banks are required by the Federal Reserve to retain the majority of checks for a reasonable duration of time.
Two business days to a maximum of six business days can be considered a “reasonable” amount of time.
A bank may also put a hold on a check if it has good reason to believe it will not be collected.
Two to five business days may pass before the amount of a deposited check that exceeds $5,525 is released.

How Check Holds Work

It was mandated by the Expedited Funds Availability Act of 1987 (EFAA) that local checks could only be held for two business days. Following 2010, all checks in the US were regarded as local. Five days has been added to the two-day hold as a reasonable maximum for holding certain checks.

Before crediting a customer’s account, the Federal Reserve mandates that banks retain the majority of checks for a maximum of one “reasonable period of time.” This is recognized as two business days for checks drawn on the same bank and up to six business days for checks drawn on different banks. Items may be held by financial institutions for one business day after the deposit.

Many use the term EFAA Regulation interchangeably with (Reg) CC.

Checks may be subject to one of six possible holds at banks:

Any amount that exceeds a $5,525 deposit can be held. This “remainder” needs to be made available in a timely manner—two to five business days is the norm. Such deposits are considered large deposits.
Redeposited checks can be retained for a fair amount of time, but if a customer returns a check for a missing endorsement or because it was postdated, the bank cannot keep the check as being redeposited even after it has made the necessary corrections.
Banks can hold checks from funds that are repeatedly overdrawn. If an account balance was negative on six or more banking days in the last six months, or if the account balance was negative by $5,000 or more twice in the same period, the account is deemed to be repeatedly overdrawn.
If a bank has good reason to believe the check won’t be collected, it may put a hold on it. This is referred to as “doubtful collectability. Postdated checks, checks with dates six months or older, and checks that the paying institution has decided it won’t honor can all cause it. Customers who have doubtful collectability must be notified by banks, along with the precise cause.
Checks deposited during emergencies, like natural disasters or communications failures, may be retained by a bank. These might make it impossible for the bank to carry out its regular operations. Such checks may be held by a bank until circumstances allow them to disburse the necessary funds.
Deposits made into the accounts of new customers—those who have had open accounts for less than 30 days—may be retained by banks. Banks can choose an availability schedule for new customers.

Ask a Banker: What is a check hold?

FAQ

How long can a bank hold a large check deposit?

The Federal Reserve has set baseline rules for check deposits: The first $225 must be available the next business day, while amounts from $226 to $5,525 must be available within two business days after the deposit, and amounts of $5,525 or more generally should be accessible on the seventh business day.

What happens when you deposit a check over $10000?

Does a Bank Report Large Cash Deposits? For individual cashier’s checks, money orders or traveler’s checks that exceed $10,000, the institution that issues the check in exchange for currency is required to report the transaction to the government, so the bank where the check is being deposited doesn’t need to.

Do banks get suspicious of large cash deposits?

Most banks have flexible policies on how much you can deposit. If you plan to deposit more than $10,000 at a bank, remember that the transaction will be reported to the federal government. This enables authorities to track potentially suspicious activity that may indicate money laundering or terrorist activity.

What does a 7 day hold on a check mean?

In some cases, however, we may place a deposit hold on these funds and delay availability for up to 7 business days. Common reasons for placing a hold on a check or deposit include but are not limited to: Accounts with frequent overdrafts.

Why do banks hold check deposits?

New customers: Banks are more likely to place holds on check deposits from new customers than from customers with whom they’ve developed a long and trusted relationship. Large deposits: Checks worth large amounts, especially those in excess of the total current value of your account, are more likely to be held.

What happens if you deposit a large check?

Large checks: Depositing a larger check could result in a hold if the bank wants to first verify that the check-writer has enough money to cover it. Banks must generally make the first $5,525 available to you according to its normal funds’ availability policy. A hold may be placed on the remaining check amount.

What happens if you make a large deposit?

If you make an unusually large deposit, your bank may place a hold on bank account funds until they can verify that these funds will clear. The same applies to multiple large deposits made in a short-time period. One reason this action is taken to help protect consumers from accidentally writing checks that might bounce.

What happens if a bank holds a deposit?

Banks are concerned that checks written out to you could bounce or that those checks are not legitimate. A hold on the deposit gives the bank a few more days to find out whether anything is wrong. Banks are allowed to be as generous as they want when making funds available.