A bank may choose to hold a check longer if it's an unusual deposit if you've never deposited a check from that payer before, if the check is for a large amount, or if the check is from an international bank. The latter requires a much longer hold time because it can't be easily verified.
Delays usually occur because: You're depositing a large amount in checks — generally more than $5,000 — in a single day. The account has been open for less than 30 days. The account has repeated overdrafts in the past six months.
Large deposits: Checks worth large amounts, especially those in excess of the total current value of your account, are more likely to be held. Frequent overdrafts: If an account has a repeated history of overdrafts, banks may be more likely to place holds on checks to ensure they clear before releasing the funds.
Large deposits (those greater than $5,000) can be held for a “reasonable period of time,” between two and seven business days, depending on the type of check.
Deposits of $5,000 or less usually clear within 3 business days. Deposits of more than $5,000 usually take 4 business days to clear. The first $200 of the total check deposits will be available no later than the first business day after the deposit, usually available immediately.
Most checks take two business days to clear. Checks may take longer to clear based on the amount of the check, your relationship with the bank, or if it's not a regular deposit. A receipt from the teller or ATM tells you when the funds become available.
Depositing a big amount of cash that is $10,000 or more means your bank or credit union will report it to the federal government. The $10,000 threshold was created as part of the Bank Secrecy Act, passed by Congress in 1970, and adjusted with the Patriot Act in 2002.
Essentially, any transaction you make exceeding $10,000 requires your bank or credit union to report it to the government within 15 days of receiving it -- not because they're necessarily wary of you, but because large amounts of money changing hands could indicate possible illegal activity.
According to banking regulations, reasonable periods of time include an extension of up to five business days for most checks. Under certain circumstances, the bank may be able to impose a longer hold if it can establish that the longer hold is reasonable.
The FDIC's Regulation CC addresses bank deposits. Banks must place a hold on check deposits of $5,000 and up. When you deposit an amount up to $5,000, the bank can place a hold on it for two business days, and any amount over $5,000 will be released after seven business days.
1 Sometimes there are circumstances that cause a check deposit to be placed on a temporary hold of up to seven business days. We place the hold to protect you from fraud, overdrafts, or fees that may occur if we were to make funds available immediately and the check is returned to you.
Go to your local bank or credit union. Take your check to a friend or family member's bank or credit union. Go to the bank or credit union that issued the check to cash it. Go to any bank or credit union to cash a check.
The fastest way to have access to check funds is to deposit the check in person at a bank or credit union branch. That ensures the deposit is made before the bank's cut-off time, which speeds up the process. Mobile check deposits and those made at ATMs after hours typically take longer to clear.
Out-of-state checks: Checks from out-of-state banks may also trigger holds. These holds may be longer than the other types of holds, because the bank will have to wait a bit longer to collect the funds from the other bank since it's located out of state. These holds may be placed for up to 10 business days.
As mentioned, the laws around deposits of more than $10,000 were created to deter terrorist activities and financially motivated crimes such as money laundering. According to the Bank Secrecy Act, the company or individual receiving the money has no more than 15 days from when the cash was received to file a report.
Reasons your check might take longer to clear
Your check could take longer than one business day to clear for a number of reasons: Amount of the check: If the check is for a large amount, then a bank may hold the check for longer because of the greater risk the bank assumes by accepting it.
What is a large deposit? A “large deposit” is any out-of-the-norm amount of money deposited into your checking, savings, or other asset accounts. An asset account is any place where you have funds available to you, including CDs, money market, retirement, and brokerage accounts.
Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000.
Contact Your Bank
You can ask your bank to provide an explanation for the hold or sometimes even to release the hold. In most cases, you won't be able to do anything about the hold though, and because all banks have them, you can't switch banks to avoid them either.
Banks don't place restrictions on how large of a check you can cash. However, it's helpful to call ahead to ensure the bank will have enough cash on hand to endorse it. In addition, banks are required to report transactions over $10,000 to the Internal Revenue Service.
This requires financial institutions to report to the federal government any withdrawals of $10,000 by a depositor in a single day. The purpose of the BSA is to help the government monitor financial transactions that may be a signal of illegal activity like money laundering, purchases of illegal goods, or terrorism.
A check has not necessarily cleared just because the money is availble in your account or appears on a receipt. Federal law requires your bank to make the funds available to you within a certain amount of time, whether the funds actually arrived from the other bank or not.
Financial institutions have to report large deposits and suspicious transactions to the IRS. Your bank will usually inform you in advance of submitting Form 8300 or filing a report with the IRS. The Currency and Foreign Transactions Reporting Act helps prevent money laundering and tax evasion.
The Short Answer: Yes. The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. But, in reality, the IRS rarely digs deeper into your bank and financial accounts unless you're being audited or the IRS is collecting back taxes from you.
The IRS requires any trade or business to file Form 8300 if they've received any cash payments over $10,000. Financial institutions such as a bank must also report all transactions by, through, or to the institution by filing a Currency Transaction Report for cash transactions that exceed $10,000.