Personal Finance

Made a deposit and not sure when funds will be available?

Comments 5 Comments

Many people overdraw their accounts because they don’t know when the funds they deposited will be available to use.  When will money you deposited be available?

It depends on a couple of things. In general it depends on:

  • Where you bank.  Different types of institutions are under different sets of rules.  This article covers general rules for FDIC regulated banks.
  • How you bank? Do you prefer to deal with people or make all of your deposits electronically or by mail?
  • The location and type of paying bank.
  • Whether you have repeatedly overdrawn your account(s).

Cash deposits: If you hand your cash over to the bank employee, your money should be available for withdrawal the next business day following the day on which you made your cash deposit.  If you don’t make the deposit to an employee of the bank, but drop it in the slot outside the bank, your funds should be available the second business day following the day you make your deposit. 

Electronic payments: In general a bank is required to make your funds available for withdrawal not later than the business day after the banking day on which the bank received the electronic payment. When does the bank ‘receive’ the payment?  A bank receives an electronic payment only when the bank has collected the funds from the paying party, and has the information about the amount to be credited to your account.

Checks:  This depends on who is paying you, and where that person’s/entity’s bank is located. 

  • In general if a check is drawn against the US government, and you (the payee) deposit it into your account it should be available the next business day, assuming you endorse it correctly.
  • A check payable by a state or local government, should also be available the next business day, if you live in the same state, and you deposit it into your account. 
  • Cashier checks -  If you don’t deposit a cashier check in person, a bank is not required to make the funds available for withdrawal until the second business day after the banking day on which the funds were deposited.
  • Non-local checks – Funds should be available for withdrawal not later than the fifth business day following the banking day on which funds are deposited.

ATM deposits: If you deposit cash or check in an ATM that is affiliated with your bank, or in the same banking group, your funds should be available the next business day.  However if you deposit cash or a check in an account at a nonproprietary ATM it could take up to five business days following the day the funds are deposited.

Keep in mind these are general rules that apply to Federally regulated banks. Credit unions, state banks and specialty houses like brokers are subject to different rules and regulations.  Ask the bank where you have your accounts to furnish you with a set of rules so you will know what to expect. 

And of course there is an exception to the general rules. The rules go out the window if you repeatedly overdraw your accounts.  Your accounts are ‘repeatedly overdrawn’ if:

  • On six or more banking days within the preceding six months, your account balance was negative, or the account balance would have become negative if checks or other charges to the account had been paid; or
  • On two or more banking days within the preceding six months, your account balance was negative, or the account balance would have become negative, in the amount of $5,000 or more, if checks or other charges to the account had been paid.
  • The bank has reasonable cause to doubt the collectibility of a check deposited in your account.

Remember banks can make funds available sooner.  Most don’t, but some do, depending upon the policy each bank has about customer service.  Some reward long time customers, business customers, or customers which maintain large accounts by being more flexible about overdrafts.  Banking policy is controlled by the management of each bank.  It is always best to be conservative and expect the bank will hold onto your money as long as it can.

Do you have a gripe with the way your deposits are handled?  Share your comments below

  • Liz S.

    I thought $100 had to made available the day of a deposit and the rest fall within the rules you specified. I seem to remember hearing about that and then I see my bank make $100 available one day and the rest of a deposit the next day or two.
    This could be a dated rule, though.

  • Valary Miller

    Good question Liz. Technically the bank has to make the $100 available on the banking day after the deposit. Keep in mind there are plenty of exceptions and many banks have policies that allow customers to withdraw certain amounts on the same day the of the deposit.
    12 CFR 29.10(c)(1)(vii)(A) & (B)states – A depositary bank shall make funds deposited in an account by check available for withdrawal not later than the business day after the banking day on which the funds are deposited, in the case of -
    (vii) the LESSER of -
    (A) $100
    (b) The aggregate amount deposited on any one banking day to all accounts of the customer by check or checks not subject to next-day availability under paragraphs (c)(1)(i) through (vi) of this section.
    The OSC this section says that the bank may aggregate all local and non-local check deposits made by the customer on any given banking day for the purposes of the $100 next-day availability rule.
    Thanks for the question Liz.

  • Kris

    Why do banks continue to keep a hard hold on making the funds available even when they have already received the funds? This was a transaction we do annually concerning the owner’s payroll. His check was deposited into our payroll account on Monday, and paid by his bank on Wednesday. Different town, but same region. On Thursday, the day before the check date, ADP pulls the tax amount from the account. On Friday, the bank calls to tell us the hold is still on the deposit and the withdrawal by ADP will be returned NSF. There is a 20-year history with this bank, and it’s a transaction we do every year at this time. The owner’s checks have never been returned for any reason. This ended up causing a problem for us with ADP, but at least the bank is writing a letter on our behalf. Why wasn’t the hold removed after the bank had already collected the funds?

  • Ezrah Thomas

    If I deposit money into my bank account, will I be able to use that money on the same day using my banking card?

  • Dana

    Yesterday I made a deposit at Wells Fargo – it was a State issued check. Today I was overdrawn because they will not make the funds available until tomorrow (two days). When asked why they do not comply with the law, I was told that their “business day” ends at 4pm, so any deposit made at the branch between 4pm and 6pm yesterady is actually TODAY’S business day – so funds don’t legally have to be available until the next day. Is that legal? With that sort of logic a bank could say their “business day” ends at 10am! Then only checks deposited between 9am and 10am would be available the next day, but all others would take 2 days!!!! Who regulates this? How do I get my money back for fees from the overdrafts? Can I sue them? or who prosecutes?
    Dana :-)

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