Getting your money after a check deposit

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Dear Dr. Don,
I deposited a check for $4,000 from a possibly shaky source. Since I have that amount in my account already, the bank says I have access to the money. How long must I wait before I know the source’s check is good? After waiting awhile, is there a way to check with the other party’s bank to verify that the check did clear and the money was received by my bank?

— Keith Check

Dear Keith,
I guess you know by now whether this particular check was good. As for the bigger picture, banks must follow federal guidelines on funds availability in your account. The Federal Reserve’s Regulation CC establishes the maximum amount of time deposited funds can be placed on hold. Your banker can choose to make deposits available sooner than required, but is under no obligation to do so.

Since you have $4,000 or more of funds on deposit, the bank may have been willing to expedite the funds availability on the deposit. That doesn’t mean you’re home free. If the check bounces, the bank will reverse the deposit and you will lose the funds.

You’ll have better luck initially working with your bank to make sure that you received good funds in your account. The federal regulation says: “Paying banks are required to provide notice of nonpayment to the depositary bank on all returned checks of $2,500 or more. This notice is to be received by the depositary bank no later than 4 p.m. local time on the second business day following presentment.” Your bank’s ability to reverse the deposit because of fraud or insufficient funds extends beyond that deadline.

If the check bounces, your options include contacting the payer to make alternate payment provisions, such as cash. You can contact the bank and ask if there is now enough money in the account for the check to clear and try to cash the check in person at the bank branch. A last resort is to take legal action to get payment.

I suggest you stop accepting shaky checks. Use of cashier’s checks provides a better chance that you’ll get the money you are owed.

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