When a Hold Is Released Off a Bank Account, Are Funds Readily Available?
- A bank can place a regular, extended, new account or exception hold on the funds deposited into an account. The hold times vary and depend on the types of items being deposited. A bank may place a regular hold, which may last up to two business days on all or a partial deposit; an extended hold is for large checks. A bank may set an extended hold for up to seven business days. All deposits into accounts less than 30 days old are subject to a new account hold, which can be up to nine business days. Exception hold is for deposits into an account that has been repeatedly overdrawn over the past six months. If a bank has a reason to doubt that a deposited item will clear, it may place an exception hold on the account. An exception hold may be up to 11 business days.
- The Federal Reserve Bank established Regulation CC, also called Reg CC, that stipulates when a hold may be placed on an account and how long it may last. Reg CC only gives deposit hold guidelines to financial institutions. Each bank sets up its own funds availability policy that it must give to every account holder. According to Regulation CC, a financial institution must notify a depositor of a hold being placed on an account at the time of the deposit or the following business day. It may notify verbally or in writing.
- Regulation CC states that certain deposited items must be available on the following business day. These include cash, federal, state and local government checks, electronic deposits, U.S. Postal Service money orders, certified, cashiers' or tellers' checks, and items drawn on the same financial institution. A bank may release the first $100 of a deposit by the next business day and the remaining funds on the second business day. A bank may extend a hold by one day if a deposit is not made in person but through mail or an ATM.
- A bank may extend a hold on certain items if it has reason to doubt that an item will clear. Account holders may become victims of scams that involve cashier's and certified checks, and money orders. To reduce the risks, a bank may place an exception hold on a check or a money order that is suspected to be fraudulent. It may release the hold if it can verify the authenticity of the item and the availability of funds.
