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After I Write a Check

What Happens to the Money? How Long do I Have?

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Question: What happens after I write a check? Am I informed when it gets cashed? When does the money come out of the account? This is totally new to me…

Answer: Welcome to the world of checkwriting. Once you write a check, you should assume that the funds will leave your account the moment you hand the check over. This won’t actually happen, but it’s safest to operate under the assumption that it could happen.

The answer to your question about notification is easy: you will not be informed when a check is cashed. The only exceptions would be if:

  • The check bounces and your bank contacts you
  • You have set up alerts on your account that inform you of certain transactions
If you want to know when funds leave your account, you can always just login to your account and view the recent transactions.

When does the Money Leave?

Your next question is a bit more complicated. Before we get into the details, it’s worth knowing that you should not pay by check if you don’t currently have funds in the account. It’s technically illegal to do so. You can get away with it in many cases, but it’s a bad habit to develop.

How fast will the money leave your account? It depends on several factors, including how and when the check is deposited. The funds can only come out of your account after the check is presented to your bank. For that to happen, your payee (the person you wrote the check to) has to try to deposit or cash the check. In many cases, they’ll take the check to their bank, which will then forward a request to your bank. When your bank pays the other bank, the funds disappear from your account. This process can take a few business days.

However, there are ways to collect your money more quickly. Your payee can deposit the check electronically using a mobile phone, computer, or check scanner attached to a cash register. This speeds up the process considerably. Your check is converted to an image, and that image is sent to all the banks involved electronically. When your bank receives the request for funds, the money disappears.

There’s even a way to make the process faster still: your payee can take the check to a bank and try to cash it. If they go to your bank (or a branch of the same bank you use for your checking account), you’ll need to have 100% of the money required in your account. If you don’t, the request to cash the check will be denied, and you may owe somebody some fees.

How to be Safe

What can you do to make sure that you don’t run into any problems? Your best bet is to know how much you have available to spend, and don’t spend a penny more. This is more difficult today than it was 20 years ago: nowadays you might spend money from your checking account when you use your debit card, or funds might be withdrawn automatically when you pay your bills via ACH.

To have a reasonable idea of how much you can spend, you’ll need to know what’s going on in your account. Login and see what deductions appear each month automatically (your utilities or mortgage payments, for example). Keep track of when you use your debit card. Balance your checkbook so that you know how much you need to keep in your account – those checks you wrote will get deposited someday.

If you’re having a hard time keeping track of your account, you might want to use a credit card for everyday spending (just make sure you pay it off in full every month). That will simplify things by keeping your account activity to a minimum. You can familiarize yourself with the regular monthly drafts out of your account, and you can use a check register or spreadsheet to keep your account balanced.

Most importantly, don’t write checks unless you have money in your account – even if you know that the funds will be there in a few days. If you find yourself tempted to do so, it means something needs to change (either your spending habits or the tools you use for cash-flow).

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