Check Hold
Categories: Banking, Regulations, Econ
Whenever one deposits a check and sees that the deposit is recognized, but that there is a waiting period before funds are credited to the account...that waiting period is known as the Check Hold period.
The banks, while conveniently capturing the overnight interest float on thousands to millions of other checks, once used to abuse this waiting period for up to a week or longer. Until 2010, that is, when all US-issued checks were considered local and subject to a maximum two-day hold except in cases of an amount exceeding $5,000, missing endorsements, issuer postdating, a history of bouncing checks, or questionable collectibility from the issuer or issuing institution...or in the case of natural disasters.
Of course, now with Zelle and other forms of immediate funds transfer, have you ever asked why banks need to still hold those funds for 48 hours? Now you know why. It’s the float. Always has been, always will be.
