Why Banks Place Holds on Your Checks

Last Updated on January 17, 2026 by admin

When you deposit a check at your bank, you may have encountered the frustrating experience of having funds placed on hold. These holds, imposed by banks for various reasons, can delay access to your money and disrupt your financial plans. Understanding why banks place holds on checks is crucial for navigating the banking system efficiently

Banks often place holds on checks deposited into checking accounts for several reasons. One primary reason is to verify the legitimacy of the check and ensure that the payer has sufficient funds in their account. This process helps protect both the bank and the customer from potential fraud and financial losses.

Additionally, banks may impose holds on checks from new customers, especially within the first 30 days of account opening, or on large deposits typically over $5,000. Accounts with frequent overdrafts or a history of returned checks may also experience holds as a risk management measure

The duration of a check hold can vary based on several factors. For most standard checks, funds are usually available by the second business day after deposit. However, the first $225 of a non-‘next-day’ check must be available by the next business day.

Larger deposits over $5,525 may have longer holds, with the portion exceeding that amount generally becoming accessible on the seventh business day. New accounts, repeatedly overdrawn accounts, or suspected fraudulent checks may also face extended holds.

These hold times are regulated by federal law to ensure reasonable availability of funds while allowing time for checks to clear

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Reason for Hold	Typical Hold Duration
Verification of check legitimacy	1-5 business days
New customer account	Up to 7 business days
Large deposit over $5,525	Up to 7 business days
Frequent overdrafts	Varies
Suspected fraud	Varies

Customers can take proactive steps to avoid having their checks held by banks. Opting for electronic payment methods like direct deposits, ACH transfers, or wire transfers can result in faster clearance compared to paper checks. Using cashier’s checks or certified checks can also lead to quicker availability of funds. Maintaining a good account history with minimal overdrafts and communicating with the bank about anticipated large deposits can help build trust and potentially reduce hold times.

Additionally, depositing checks in person at a branch during business hours, rather than through ATMs or mobile apps, can sometimes lead to faster processing

Table of Contents

Reasons for Banks Place Hold on check

Banks place holds on checks to reduce the risk of fraud, insufficient funds, or returned payments. Here are the most common reasons explained clearly:

1. Large Check Amount

Checks over a certain dollar amount (often $5,525+ in the U.S.) may trigger an extended hold. So Banks need extra time to verify the funds.

2. New Account

Accounts opened within the last 30–90 days are considered higher risk. Therefore Holds are longer until a banking history is established.

3. Insufficient Funds Risk

The issuing account may not have enough money.The bank waits to ensure the check clears before releasing funds.

4. Out-of-State or Foreign Checks

Checks from a different state or country take longer to verify. International checks often require manual processing.

5. Unusual Deposit Activity

Deposits that don’t match your normal pattern (sudden large checks, new payer). May trigger fraud-prevention reviews.

6. Poor Account History

Past overdrafts, returned checks, or negative balances. Banks apply holds to protect against loss.

7. Suspected Fraud or Alteration

Checks with mismatched signatures, handwriting, or visible alterations. Funds are held until authenticity is confirmed.

8. Checks from High-Risk Sources

Personal checks (vs. cashier’s checks), Checks from unknown businesses or individuals

9. Mobile Deposit Risk

Mobile-deposited checks may receive longer holds than in-branch deposits. Banks verify the check wasn’t deposited elsewhere.

10. Regulatory Requirements

Banks must follow availability rules (e.g., U.S. Regulation CC). Certain situations legally allow extended holds.

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Types of Checks that May Trigger Holds:

Banks often place holds on certain types of checks because they carry a higher risk or take longer to clear. Here are the main categories of checks that may trigger holds:

Checks and deposits above a certain threshold (often $5,000 or more) may be held longer to verify funds.
Out-of-State or Non-Local Checks: These take longer to process through the clearing system, so banks may delay availability.
Third-Party or Endorsed Checks. If someone signs a check over to you, banks often hold it to confirm authenticity.
Foreign Checks International checks can take weeks to clear due to currency conversion and foreign banking systems.
Cashier’s Checks, Certified Checks, and Money Orders. While generally considered safer, banks may still place holds if the amount is large or if fraud risk is suspected.
Checks from New Accounts. If your account is recently opened (usually within 30 days), banks may apply stricter holds.
Suspicious or Unusual Checks Any check that looks altered, comes from an unfamiliar source, or doesn’t match your normal deposit pattern may be flagged.

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Types of bank check: Holds and Their Impact

Banks use different types of check holds to manage risk and ensure funds are available before releasing money. Each type has a distinct impact on your cash flow and financial planning. Here’s a breakdown:

Standard Hold (Local Checks) Usually 1–2 business days. Applied to routine deposits to allow clearing through the banking system.
Extended Hold (Non-local or Large Checks) can last 5–7 business days. Triggered by out-of-state checks, large-dollar deposits, or checks from unfamiliar institutions.
New Account Hold Accounts opened within the last 30 days often face stricter holds. Banks may delay funds longer to reduce fraud risk.
Exception Hold is applied when a check appears suspicious (altered, inconsistent signatures, unusual deposit patterns). Duration varies depending on the investigation.
Foreign Check Hold: International checks may take weeks to clear due to currency conversion and foreign banking systems.
Third-Party/Endorsed Check Hold: If a check is signed over to you, banks often hold it longer to verify authenticity.

Regulations Governing Check Holds

The main regulation governing check holds in the U.S. is Regulation CC, which implements the Expedited Funds Availability Act (EFAA). It sets maximum hold times, disclosure requirements, and rules for how banks must handle check deposits.

Expedited Funds Availability Act (EFAA, 1987)
- Passed to prevent banks from placing excessively long holds on deposited checks.
- Establishes maximum permissible hold periods for different types of deposits.
- Ensures customers have quicker access to their funds.
Regulation CC (12 CFR Part 229)
- Issued by the Federal Reserve to implement the EFAA.
- Defines funds availability schedules (e.g., next-day availability for certain checks, longer for others).
- Requires banks to disclose their funds availability policies clearly to customers.
- Sets rules for the return of unpaid checks to reduce risk for depositary banks.
Check Clearing for the 21st Century Act (Check 21, 2003)
- Allows banks to process substitute checks electronically, speeding up clearing.
- Works alongside Regulation CC to modernize check processing and reduce delays.

Maximum Hold Periods Under Regulation CC

Local checks: Funds are generally available within 2 business days.
Non-local checks: Up to 5 business days (though “non-local” distinctions have largely been eliminated with electronic clearing).
Large deposits (over $5,000): Extended holds permitted.
New accounts (opened within 30 days): Longer holds allowed.
Suspicious or exception checks: Banks may extend holds if fraud is suspected.

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Expedited Funds Availability Act

The Expedited Funds Availability Act (EFAA) was enacted in 1987 to standardize the hold periods on deposits made to commercial banks and regulate the use of deposit holds.

This legislation requires financial institutions to disclose their hold policies to account holders, providing specific timelines for when deposited funds must be made available to customers.

The EFAA enhances transparency and predictability in banking transactions, ensuring that bank customers are informed about when they can access their deposited funds

Since its inception, the EFAA has undergone several amendments to adapt to changes in the financial industry and technology. Notable developments include the implementation of Regulation CC in 1988, which set specific availability schedules and disclosure requirements.

The Check Clearing for the 21st Century Act (Check 21) in 2003 further modified the EFAA by facilitating electronic check processing. In 2010, the Dodd-Frank Act transferred some rulemaking authority to the Consumer Financial Protection Bureau and mandated inflation adjustments to dollar amounts in the regulation

The EFAA has evolved through periodic adjustments and regulatory updates. The Consumer Financial Protection Bureau and the Federal Reserve Board announced a final rule-making for cost of living adjustments (COLAs) to the Regulation CC funds availability rules, which are required every five years.

The latest adjustments, effective July 1, 2025, include increases in various dollar thresholds related to funds availability, such as the minimum amount for holds and the large-deposit threshold

Hold Periods:

Federal Reserve Guidelines: The Federal Reserve sets baseline rules for check deposits.
First $225: The first $225 of a check deposit must be available the next business day.
$226-$5,525: Amounts from $226 to $5,525 must be available within two business days after the deposit.
Over $5,525: Amounts over $5,525 generally should be accessible on the seventh business day.
Bank-Specific Policies: Banks may have their own policies that allow for faster access to funds than the Federal Reserve guidelines require.

Provision	Previous Amount	New Amount (2025)
Minimum amount for immediate availability	$225	$275
Cash withdrawal amount	$450	$550
Threshold for new accounts, large deposits, and repeatedly overdrawn accounts	$5,525	$6,725
Civil liability amounts	$1,100	$1,350
Civil liability amounts (large)	$552,500	$672,950

The EFAA mandates that banks make funds from certain types of deposits, like cash and government checks, available by the next business day in most cases. For other check deposits, the EFAA establishes maximum hold periods, typically 2-5 business days, after which banks must make the funds available. This law aims to standardize hold policies across banks and ensure customers have timely access to their deposited funds.

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