Why is it necessary for banks to hold checks?

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deanmachine777 | 3 years, 4 months ago

It doesn't take much for some banks to decide a certain check has a high risk of bouncing. If it's a non-local check, if it's for over $1,000, if your account is new...all those things could make a bank decide to hold the check until they can sufficiently determine the funds will be there. Kind of a pain in the butt, but...

source(s):
http://www.wisegeek.com/why-do-banks-hold-checks.htm
http://cbs5.com/seenon/check.cashing.hold.2.443372.html

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dzynone | 2 years, 10 months ago Report

That makes sense and I'm cool with that, but in this digital time why can't the funds be verified instantly? Are they holding our funds collectively so they can earn more interest? It really takes DAYS to verify funds? Is someone walking it over there?

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carriep | 3 years, 4 months ago

Although it may seem like it, what with debit cards and online banking, that money transfers instantaneously from one point to another, this is not always the case. With checks, it usually takes a few days for the money to be withdrawn from one account and placed into the other account. The bank must also verify that the money is there in the account so that the check doesn't bounce due to insufficient funds. Until the process is completed, it's not a sure thing that the money is there. So, a 2 to 3 day hold up. It's very annoying, I agree, especially when I've deposited a check, need to access the money, but the bank won't let me have it for a few days. Grrr...

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lesliec | 3 years, 4 months ago

My bank will hold all checks until they clear. Guess they have to make sure there is money in the other accounts. Smart but very frustrating!

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