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Regulation CC sets check 'hold' rules

Federal law dictates how long a financial institution, such as a bank, can hold onto your money before making it available to you, and requires the bank to make sure you know the rules.

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If you have a checking or savings account, the bank must let you know how long after a deposit that your funds will be available for withdrawal, and they have to tell you before you open a new account.

If the availability terms on an existing account change, the bank should notify you 30 days before the change is made. If the change is to your benefit -- in other words, if your funds will be available sooner than under the old terms -- the bank is supposed to notify you no later than 30 days after the change becomes effective.

The rules
The rules are contained in the Federal Reserve Regulation CC, which applies to U.S. banks and the American branches of foreign banks.

The following types of deposits must be made available on the first business day following the banking day of deposit ("next day availability"):

1. Cash deposited in person to a bank employee.

2. Electronic payments received by the institution for deposit in an account. An electronic payment is considered received when the institution has received both payment in collected funds and information on the account and the amount to be credited.

3. U.S. Treasury checks deposited in an account held by a payee of the check. Treasury checks deposited at an ATM owned by your bank must be accorded next-day availability.

4. U.S. Postal Service money orders deposited in person to a bank employee and into an account held by the payee of the check.

5. Federal Reserve Bank and Federal Home Loan bank checks deposited in person to a bank employee and into an account held by the payee of the check.

6. State or local government checks deposited in person to a bank employee and into an account held by the payee of the check, if your institution is in the same state as the payer of the check.

7. Cashier's, certified, or teller's checks deposited in person to a bank employee and into an account held by the payee of the check.

8. Check drawn on an account held by your institution ("on-us checks") deposited in person to a bank employee or at on-premises ATMs or night depositories, if the branch or branches involved are in the same state or check-processing region.

9. The first $100 of a deposit that is not already subject to next-day availability must be made available by the first business day following the day of deposit.

Exceptions: When deposits of types 1, 4, 5, 6 and 7 are not made in person (for example, when they are made at one of your bank's ATMs), the funds must be made available by the second business day. Deposits, cash or checks, made at an ATM not owned by your bank must be made available by the fifth business day.

 
 
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