Account freezes can be put in place by an account holder (in the event of a lost or stolen debit card), or the bank or regulatory authority. Freezes can occur for many reasons, including suspicious activity, suspected criminal activity, civil actions, or garnishments.
Deposit holds typically range from 2-7 business days, depending on the reason for the hold. For deposits made on weekends, funds are considered deposited on Monday (the first business day), so the hold will go into effect the next business day (Tuesday).
A financial institution's action of temporarily suspending or restricting access to a bank account makes it a frozen bank account. This means you won't be able to transfer money or withdraw funds, and any scheduled payments will be temporarily paused.
Contact Your Bank
If deposited funds are being held for a longer period than you expected, it's a good idea to call, email or stop by a branch of your bank to ask about specifics of its hold policy. You can ask your bank to provide an explanation for the hold or sometimes even to release the hold.
A creditor may place a bank levy on your account to collect on an unpaid debt. With a bank levy in place, your account will be frozen until the creditor takes the money you owe directly from your account. The best strategy for fighting an account levy is to contact a professional familiar with this legal proceeding.
File banking and credit complaints with the Consumer Financial Protection Bureau. If contacting your bank directly does not help, visit the Consumer Financial Protection Bureau (CFPB) complaint page to: See which specific banking and credit services and products you can complain about through the CFPB.
A temporary account hold prevents you from withdrawing or spending the money straight away. Financial institutions can place a hold on funds in a bank or credit account. This is especially common with check deposits.
In the case of fraud prevention or suspected illegal activity, the account may be frozen indefinitely while the bank investigates. In such cases, the length of the freeze may depend on the complexity of the case and legal requirements.
When a payee is placed on hold, that payee's direct deposit instructions are temporarily suspended and all payments are produced in the form of a state warrant.
Some banks or credit unions may make funds available more quickly than the law requires, and some may expedite funds availability for a fee. If you need the money from a particular check, you can ask the teller when the funds will become available.
Deposits to your checking account may be subject to holds, which restrict your access to the funds, typically lasting up to seven business days for certain circumstances. Federal laws regulate deposit holds, with most deposits being available within one or two business days.
The Federal Reserve says that a "reasonable" extended hold generally means one additional business day (total of two business days) for a bank's own checks and five additional business days (total of seven) for most other checks.
You can contact your bank and place a stop payment order on the recurring transaction. Generally, a stop payment order is only good for six months. To stop payment, you will need to notify your bank at least three business days before the next payment is scheduled to be made. Notice may be made orally or in writing.
An account hold restricts an account holder from accessing funds. When a financial institution places an account on hold, it may do so to protect the customer and the bank from a potential loss. A hold may last a few days, but its duration depends on the reason.
Call and write your bank or credit union
Tell your bank that you have “revoked authorization” for the company to take automatic payments from your account. You can use this sample letter . Some banks and credit unions may offer you an online form.
If your account is frozen, you cannot access your funds, make withdrawals, or complete transactions until the issue is resolved. This can occur due to legal issues, suspicious activities, or non-compliance with regulations.
Identifying suspicious activity involves monitoring customer transactions, identifying patterns, and monitoring for red flags. Red flags may include unusual transaction amounts or frequency, transactions with high-risk countries or entities, or transactions involving a new customer with no prior banking history.
Banks may freeze bank accounts if they suspect illegal activity such as money laundering, terrorist financing, or writing bad checks. Creditors can seek judgment against you, which can lead a bank to freeze your account. The government can request an account freeze for any unpaid taxes or student loans.
Unpaid debts to creditors, such as credit card companies or the government, can result in your bank account being frozen. While lenders cannot freeze your account directly, they can obtain a court judgment to compel your bank to do so.
A hold on an account balance occurs when a bank temporarily freezes access to either a portion of funds or the entire amount in an account. This preventative measure is put in place by banks and can affect how you withdraw or use your money.
Holds on bank accounts usually only last between two to five business days. There are certain exceptions to this, with some bank account holds lasting longer than just a few days.
The only time a bank can withdraw money without telling you beforehand is if you've defaulted on a loan (such as a personal loan or auto loan), while also holding money in a bank account at the same institution.
Failure to Release Funds
If the bank will not release funds that are legally yours, you might have a valid legal claim.
If your bank fails, up to $250,000 of deposited money (per person, per account ownership type) is protected by the FDIC. When banks fail, the most common outcome is that another bank takes over the assets and your accounts are simply transferred over. If not, the FDIC will pay you out.