Funds Availability

When I deposit a check I am never sure when the funds will be available to write checks against. What is the law?

Federal Reserve Board Regulation CC, the Expedited Funds Availability Act sets maximum time frames for the availability of certain bank deposits. Here is a partial listing...

  • Items such as cash, financial institutions' cashier's checks, U.S. Government checks, U.S. Postal money orders, electronic payments, and Maine state and Maine municipal government checks are generally available the next business day* after day of deposit.
  • Local Checks are generally available within two business days after day of deposit.

Exceptions to the above rules are deposits checks deposited to new accounts. This could result in the availability being legally extended past the above standards.

  • large deposits ($5,000 or more in checks in any one day)
  • redeposited checks
  • deposits made by check to accounts that are repeatedly overdrawn
  • deposits of checks for which the bank doubts collectibility
  • deposits made under certain emergency conditions

Check with your financial institution, since some institutions may allow you access to your funds sooner than the regulation requires.

*A business day is any weekday, Monday throughout Friday, excluding federal holidays.

If the funds are available for withdrawal, does that mean the check has been paid and cannot be returned?

NO, Financial Institutions must make funds available according to Federal Reserve Board Regulation CC, the Expedited Funds Availability Act. According to this Act most checks will be available in 5 business days. However, it will take at least a week before a check clears through the check clearing processing system and it may be returned for insufficient funds. There is a scam that relies on this difference in time. Here is how it works. You are selling a car on the internet, somebody wants to purchase the car, and they send you a check for more than the asking price and request that you send the overpayment to their shipping agent or somebody else by Western Union. Your financial institution tells you the funds are available to withdraw in 3 days. You wait 3 days and send the money to the shipper. A week after the check had been deposited it is returned as a counterfeit check. By the time you realize the check is not good, the money is gone.

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