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Out-of-State Check Clearing Process

How long does it take for an out-of-state check to clear? Does the bank release the all the money at once or is it released in stages (like some five days after the deposit and the rest five days later)?

What seems like a very simple question has a rather complicated answer. Check clearance time is the time it takes a check to be delivered to and paid by the bank on which it is drawn. That's a function of the method of delivery and any delays that might develop. Sometimes local checks take a little over two days and non-local checks take a little over five days, on average.

Non-local checks (checks drawn on banks that are in a different check processing region than the one your bank is in) can routinely be held for up to five business days. In some circumstances, your bank can place an "exception hold" on all or part of such a check that could add up to an additional six business days to the original five. The first $5,000 of the deposited check may or may not be included in that extra six days. Some types of checks require that you get quicker access to some or all of your funds.

Suppose you deposit a $25,000 non-local check to your account, and the bank places a "large deposit" hold. That would mean that the first $100 would be available on the business day after your deposit, another $4,900 would be available by the fifth business day following the day of deposit, and the remainder would be available by the eleventh business day.

If your bank does place such a hold, it should provide you a notice detailing when funds will be available for your use, and you should ask for an explanation if the notice is not clear. Finally, you also need to know that, even after your bank makes these funds available to you for withdrawal, you remain liable to the bank if the deposited check should be returned unpaid.

Published on 6/12/07