When you open an account, why does the bank generally put a longer hold on your initially deposited check?
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Banks in the U.S. are permitted to place longer holds on deposited checks during the first thirty days of a deposit relationship. The longer holds are permitted under the law and regulations because banks lobbied hard for that ability when the law was passed. The justification for the banks' insistence upon longer holds for new accounts is the fact that more fraudulent checks were deposited to new accounts than to established accounts.
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Banks in the U.S. are permitted to place longer holds on deposited checks during the first thirty days of a 