The word “check” and 2021 in the same sentence?
How can this be?
How long does it take for a check take to clear?
Even though check use seems super dated in 2020, surprisingly, a lot of people and businesses still use them.
So it’s a good idea to know how they work.
Maybe you have your own business and one or 2 of your customers like to pay by check or maybe your sweet old grandmother still sends you a check every year for your birthday.
Whatever the reason, if a check has crossed your path, you are probably wondering about how long it’s going to take that puppy to clear.
Well, the long answer is that it depends on what you mean by “clear”.
But I’m guessing that you probably want the short answer, right?
Ok, ok, here it is.
How long does it take a check to clear?
If you want the answer in a nutshell, then it usually takes 2 to 5 business days for a check to “clear”.
Business days are Monday to Friday, not including weekends or public holidays.
So, if you deposited a check on Friday the 13th (oooh spooky!) in the morning, and it took the minimum time of 2 business days, you could have access to the funds on Monday the 16th.
The latest possible time for your check to clear would be the following Thursday (the 19th).
However, as with most things involving banks and financial institutions, the answer is not always that straightforward.
So you might wanna hang fire before you spend those dollar bills y’all.
Can checks still bounce after they have cleared?
Yep. Checks can still bounce, even after the initial 2 to 5 business-day “clearing” period.
Say what?
It’s true.
Obviously, if your check is from someone you trust then you probably don’t need to worry about it bouncing.
But if you have received a check from someone you don’t know, then in order to be absolutely 100% sure that the money is yours and yours for keeps, you’ll need to wait a whopping 30 days!
Crazy huh?
Well, that’s the law for you.
Federal law says that when you deposit a check, a percentage of the funds must be made available to you in a short time.
Just because you have access to those initial funds, it doesn’t mean that your check has cleared.
The general rule is that, barring any obvious red flags, you will be given access to the first $200 of any check you deposit within 1 business day.
Rather than making you wait for the rest of the funds; some banks also allow access to the entire amount written on the check before the actual transfer of the money is complete.
All this is part of a system that has been designed to give you access to your money quicker, but it does mean that a lot of transactions are being taken “on faith” as it were.
If the bank fails to identify an issue, or the check issuer requests a cancellation, things can still go wrong.
And if a transaction does go pear-shaped, then you are the one responsible for covering any funds you might have spent.
Banks use the term “clear” very loosely, so, rather than asking when your check will “clear” ask your bank when the funds’ transfer will be complete, as this is the point at which your money is truly safe.
How can I make sure a check is legit?
If there is any doubt about whether a check issued from a US bank account holder is going to clear, you should wait a full 30 days.
Any problems that could arise should have become apparent within the first 2 to 3 weeks after you deposit the check.
However, even after the 30-day period check issuers can still claim that someone forged the check, in which case the funds would be returned to them, but this doesn’t happen very often.
Checks issued by non-U.S. banks take longer to process, so If you have received a check from a foreign bank, you’ll need to wait even longer and keep checking for the fund’s transfer to fully complete.
Final thoughts: are checks safe?
Most checks clear without any issues, and the likelihood is that yours will too.
If you trust the person giving you the check then, by all means, go ahead and spend that money!
However, as we have discussed, accepting checks can be a risky business.
The biggest risk is that you will spend the money and then be forced to pay it back to the bank.
Also, you could lose any goods or services that you exchanged for the check.
If possible, ask for a certified check as this means that the funds are guaranteed.