Why do banks hold checks for too long sometimes?what happens during check holding?
Simply put, banks hold checks to make sure that everyone that writes and receives checks gets what they’re supposed to. In the olden days, banks would have to actually send checks via US Mail to other banks and get the cash back in about a week. Nowadays with the internet, smaller checks clear much faster (within hours or 1-2 days)… however, the larger the check is, the more likely it is to be held for a longer period so that the depositing bank is sure that the funds are available.
Banks put a hold on checks to verify that the funds will be available when the check reaches the other bank. They may also put a check on hold if you have a history of non sufficient funds, overdraft issues or your account is new. I always told my customers that if the bank where the check is drawn is near, you should go directly to that bank and cash the check. If its a payroll check direct deposit is the best option…
