Federal rules allow banking institutions to put a temporary "hold" on certain deposits as a way of protecting against losses, primarily from checks drawn against accounts with insufficient funds. Depending on the type of deposit — electronic direct deposit, Treasury check, local check, large check and so on — you may have to wait anywhere from one business day to 11 business days before you can withdraw your deposit. Many consumers do not understand when their deposited funds can be made available to them. To raise awareness of the rules, we are providing responses to two common questions consumers have about holds on checks.
I deposited into my bank account in Maine a $6,000 check drawn on a bank in Texas. The next day, I received a notice from my bank that part of my deposit was being held for 11 business days because it is a "large deposit." Is my bank allowed to do this?
Yes. Federal Reserve Board (Fed) rules governing funds availability permit a bank to hold a large check ($5,000 or more) for up to seven business days if it's a local check and up to 11 business days if it's a non-local check.
First, be aware that $100 of the deposit must be made available after one business day as a way of getting some of the funds to you quickly. In addition, the bank must make the first $5,000 of the deposit available for withdrawal according to the bank's policy for non-local checks (which should be no later than the fifth business day after the deposit). For the remaining $1,000 of the $6,000 deposit, the bank is permitted under the rules to withhold the money up to 11 business days. The rules issued by the Fed also specify how and when you must be informed of the hold being imposed.
A friend says that her bank never places a hold on her deposited checks. My bank always places holds on my checks. Aren't banks supposed to use the same schedule for making funds available?
No. While all banks are subject to the same maximum hold periods established by law and the rules issued by the Fed, each bank may make deposits available sooner. Each bank determines what its policy will be. It can make all of the funds available immediately or delay availability up to the maximums permitted by law. There is no requirement that banks uniformly provide the same availability schedule.
Finally, if you need funds from a deposit quickly or if you're unsure about your bank's check-hold policies, talk with a manager at your bank. For more information about the rules governing funds availability, see a guide (primarily for financial institutions) posted on the Fed's Web site at www.federalreserve.gov/pubs/regcc/regcc.htm. You can also call 1-202-452-3693, send an e-mail to
www.federalreserve.gov/feedback.cfm or write to the Federal Reserve Board, Division of Consumer and Community Affairs, 20th Street and Constitution Avenue, NW, Mail Stop 801, Washington, DC 20551.
