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Funds Availability

The Rules Around Holding Your Deposits and Funds Availability Policies

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Man filling out deposit slip on counter in bank

Bruce Ayres/ The Image Bank/ Getty Images

A funds availability policy is a set of rules your bank uses. When you make a deposit, you can’t always spend all the money. A portion of your deposit may be frozen or held by the bank. Learn how funds availability works and what to expect.

Holding Deposits

When you deposit a check, the bank has to collect funds from whoever wrote the check to you. Normally there’s no problem; funds transfer quickly, and deposits and withdrawals flow smoothly and evenly.

However, banks can’t be certain that the money will show up. If they want to be safe, they’ll hold a portion of your deposit. They want to get a head start - if you spend all the money immediately everybody’s got problems.

Anything Goes?

Banks can't hold funds for as long as they want. Federal rules limit hold times, and banks are required to explain their funds availability policy to you. Depending on the type of deposit, funds may be released quickly or slowly. Checks from the US Treasury are generally considered safe, while personal and foreign checks are held longer.

That said, banks have some wiggle room. They can extend hold times if they think there’s a good reason. Even if their reasoning isn’t valid, you may experience headaches.

So What’s the Policy?

Every bank is different, so you should read your bank’s Funds Availability Policy. While regulators set certain limits, banks can work within those limits (and impose shorter hold times, for example). Most banks publish their policies online.

It’s also a good idea to talk to somebody if you make an important deposit. Ask when the funds will be available. You can always ask for funds to be released early - if you’ve been a customer for a while and regularly make similar deposits your bank may accommodate you.

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