How long can a financial institution place a hold on funds when a cheque is deposited?
A financial institutions decision to place a hold on funds is a proprietary matter and is outside the scope of the CPAs clearing rules. However, if a financial institution decides to place a hold on funds, one important factor it will consider is the number of days likely to be required for the cheque to reach the branch that holds the account on which it was written and, in the event that the cheque is dishonoured, its subsequent return to the branch that accepted it. More detailed information on the reasons for holds on cheques and the factors that financial institutions may consider in placing them is available in Holds on Cheques: A Means of Managing Risk.
