How long does it take for a check to clear?

How long does it take for a check to clear?

We have all faced situations where we are eagerly waiting for a check to clear. Some of the more impulsive among us may even spend money in anticipation of having a check cleared in the next day or so. In any case, uncertainty about when a check will clear can influence our decisions, financial or otherwise in life.

The short answer: 2 working days

This brings us to the obvious question, how long does it take for a check to clear? The simple and straight forward answer over here is that it takes about two working days for the checks to clear. But it takes about five working days for the banks to receive the amount. This is usually due to the fact that lots of things go on behind the scenes.

Most banks provide you with a deposit slip when you deposit a check via ATM or in-person through a bank branch. The deposit slip usually mentions the expected date of check clearance. Obviously, it is in your best interests that you keep the slip carefully with you until the amount it deposited in your account. Under normal circumstances, the check would get cleared within a day or two. However, the time that a check takes to clear largely depends on the amount of the check.

For example if you have deposited a check for $750, you might have access to $150 or $200 by the very next day. The bank would then deposit the balance amount in two additional days. For larger amounts, banks can hold the checks up to 10 working days.

Even if banks do deposit a partial amount of the check, that doesn’t necessarily mean that the check is good. Therefore if you don’t have any strong reason to trust that the check will clear, then it would be a good idea to just wait until the entire amount is cleared. If you withdraw any funds and the check eventually bounces, then you are responsible to repay the amount that you have withdrawn.

What are the processes required before a check clears?

In simple terms, this is how a check clears:

  1. You deposit a check that you’ve received from someone,
  2. Your bank receives it and sends a request to the bank of the payer.
  3. If payer’s account has sufficient balance, then the amount is deducted and deposited in your account.

As technology has advanced, a majority of checks are now processed electronically rather than being deposited and moved about in person.

No matter what the mode of check deposit is, it first goes to the bank of the beneficiary. From there it is routed with the help of a clearing house. A clearing house is an arrangement where the checks and bills from different banks are cleared and only the balance is paid out.

How can you know if your check has cleared or how can you know when your check will clear?

As discussed above, certain portion of the check might get cleared in a day or two and legally it is said to be “Available for withdrawal”. There is no easy way of knowing when your check will be cleared. With the increase in the number of fraudulent cases or scams, banks are getting more cautious about check clearances.

You can reach out to your bank and ask for an update regarding the status of the check. But be very careful not to ask if the check got cleared or not, rather ask them if the funds have been collected from the payee. The definition of check clearance differs between banks, so its best avoided.

 

Conclusion

There is no straight forward way to answer how long it takes for a check to clear. Given that having funds available for withdrawal is no indication that the check will clear, it is always advisable not to be too trusting  (or even accept) checks from people you do not know. It is also advisable to hold on till the entire amount is credited to your account before you start spending.