I deposited an out of state check and my bank placed a hold on it for six days. I need this money to meet payroll obligations. Is there a way to get the check cleared earlier?
Your bank is entitled to hold funds deposited by check for up to five business days for non-local checks, and longer, if the bank has a reason to place what is called an "exception hold." Five business days translates to a calendar week.
Banks are not obliged to place these holds, however. Some banks are willing to shorten or eliminate altogether their holds, particularly for established customers they know well.
Your best course is to talk to your bank, in the hope of showing your deposit pattern is such that you don't deposit checks that bounce. As an alternative, you may be able, in the future, to have out of state payments made directly to your account by wire transfer. Funds received that way are required to be made available no later than the day following receipt by your bank. There are some added costs of that method, but it speeds up access to your funds. Finally, if you frequently have to meet payroll obligations using funds deposited by out-of-state checks, you are working with limited working capital, and may need a working capital infusion, either from your own funds or from borrowings.
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Your bank is entitled to hold funds deposited by check for up to five business days for non-local checks, and longer, if the bank has a reason to place what is called an "exception hold." Five business days translates to a calendar week.