Technically, once a check clears it can’t be reversed, meaning the payer cannot get the funds back. The only exception to this is if the check payer can prove that identity theft or fraud has occurred, in which case they may get their money back.
When discussing the ins and outs of check clearing, it can be helpful to understand how checking accounts work, typical clearance times, and exceptions to the rule. Read on to learn more about how checks get cleared.
How Long Does It Typically Take for a Check To Go Through?
It typically takes between two and five business days for a check to clear, but some banks will process it more quickly. The first $225 is made available in one’s account the next business day after a check is deposited, and then the rest of the check will be made available in the next four days.
The time it takes for a check to clear can depend on several factors, including the relationship the account holder has with the bank, the amount of money already in their account, and the amount that the check is for. A larger check may take longer to clear than a smaller one. If it’s a government check or a check from a certified fund, the bank is required to make the funds available within one day.
Note that check clearance rules apply to paper checks only. If you pay bills electronically by ACH, a different set of guidelines will apply.
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How to Know If Your Check Cleared
In order to know for certain that a check has cleared, call the bank where the check was deposited and ask them. Banks do not inform payees if a check for less than $5,000 bounces. However, if a check for more than $5,000 bounces, banks are required to inform payees.
Financial software like SoFi can help you track checks and alert you when they clear. You may also benefit from other handy tools, including a budget planner app, debt payoff planner, and credit monitoring.
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How Check Clearance Works
When a check gets deposited, there are a few steps involved in processing and clearing it. First, the bank makes a request to take the funds out of the check payer’s account. Typically, the bank actually deposits funds into the payee’s account first, as long as the check is not flagged as risky or there’s another reason that it might not clear.
In the event that the funds aren’t available in the payer’s account, the check “bounces.” In that case, the funds are then withdrawn from the payee’s account.
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How Long Can a Bank Hold a Check?
The length of time that a bank will hold a check depends on a few factors, including the amount of the check, the bank the check is coming from, the relationship of the payee to the bank, and more. If both the payer and the payee use the same bank, the clearing time will be shorter. Usually it takes two business days for a check to clear, but it may take up to seven days.
The time that it takes for a check to bounce varies depending on the bank’s size and technology. Larger banks with more technological capabilities will know more quickly that a check has bounced. It will take longer for a smaller bank to process bounced checks. Generally after 30 days, one can assume that a check has cleared.
Factors That Affect Hold Times
In certain cases, a “risky” check may take up to seven business days to clear. The following reasons can cause this to happen:
• Insufficient funds in the account
• Checks larger than $5,525
• Accounts younger than 30 days
• Repeated overdrafts associated with the account
• Checks from international banks
Clearance Times for Large Checks
If a check is larger than $5,525, it may take up to nine business days for it to clear because the bank will want to ensure the check will clear before processing it. However, $225 of the funds may be made available within one day after the deposit. If a check is very large, it may be a good idea to inform the bank ahead of time that the transfer will be occurring to speed up the clearing time.
Personal Checks vs Government-Issued Checks
While it takes between two and five business days for personal checks to clear, banks are required by law to make funds available from government checks and U.S. Treasury checks within one business day.
Certified checks and cashier’s checks are both types of personal checks. A certified check is a check where the money is taken out of a checking account, ensuring that the funds are available in the payer’s account. Generally a certified check is required for making larger transfers. With a cashier’s check, the money is taken out of the bank’s account, also ensuring that the funds are available.
Cases of Fraud
If a check bounces, fraud protection does not cover it. The account holder is responsible for repaying the funds even if they have already withdrawn them from their account.
Once a check is cleared, the payer can’t reverse it and get their money back. However, if they can prove to the bank that the check was fraudulent or a case of identity theft, they can potentially get their money returned to their account.
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The Takeaway
Once a check has cleared, it cannot be reversed unless fraud or identity theft is suspected. However, many banks will make the first $225 of a check deposit available for immediate use.
Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.
FAQ
How can a check clear and then bounce?
If a bank doesn’t see any red flags that a check might bounce, they may go ahead and transfer funds into the payee’s account. However, it may turn out during their processing that funds weren’t available from the payer, so then the check bounces.
Can a bank reverse a check deposit?
Technically, a cleared check cannot be reversed. But if a check bounces, the bank can remove funds they had deposited into the payee’s account.
Can you dispute a cleared check?
If identity theft has occurred or if a check is fraudulent, then a cleared check can be disputed. If the bank finds the evidence to be believable, the funds may be returned to the account.
Photo credit: iStock/sturti
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