You deposited the check. You see the money in your account, but the bank says you can't withdraw the funds.
If that describes your situation, you may be experiencing a hold on your checking account. Don't worry. Unless something unexpected goes wrong with your deposit, you'll have access to your money soon. As for how long you'll have to wait – that depends.
What is a checking account hold?
Checking account holds refer to the delay between the time it takes a bank to credit a deposit to your account and the time it takes for those credited funds to become available. The basic process of putting a check into your account is fairly instantaneous. You'll see the check's amount show up in your account almost right away. However, you may notice a disclaimer that the funds aren't yet available. That's a hold. In most cases, the hold will eventually go away, and those funds will be made available. But while a hold is in place, you can't spend that money.
Why do holds happen and how do they work?
Holds happen because transferring money takes time. It might feel like technological advances have made money transfers instantaneous (and some types of transfers are nearly instantaneous), but for the banks, it still takes time to deliver money from one institution to another. While the deposit is being transferred between institutions, your bank doesn't want you spend that money, just in case something goes wrong.
The hold protects the bank from checks that bounce or get disputed. Insurance settlement checks are one of the most disputed types of checks, so it's common for banks to place a hold on those until the money is safely in your account. Large checks are also likely to trigger a hold. If you were to spend a check worth thousands of dollars only to have that check bounce, the bank would essentially lose that money. You may even be responsible for repaying that amount. To protect themselves and their customers, banks will usually put a hold on big checks.
How long will an account hold last?
The exact length of a hold varies from deposit to deposit. A bank may warn customers the hold could last up to 10 days. The hold could be lifted sooner than that. It all depends on how quickly the money physically reaches your account. Big banks with branches throughout the country have the ability to transfer money the quickest. Smaller regional banks may take longer to get the money to your account, especially if they're based in another state or country.
While banks will keep the hold in place until the deposit is fully completed, they will make a portion of the deposit available within a single business day. Usually banks will free up some of money for you within a business day. The exact amount varies, but it should be at least $200. Some banks make a point of clearing deposits as quickly as possible. Those institutions may be willing to free up thousands of dollars for you within the same day as your deposit.
What can you do about an account hold in place?
The rules around checking account holds are fairly rigid, but if you need money in your account as soon as possible, you may be able to find some wiggle room. The average customer service representative probably won't have the power to help you, but ask to speak with a manager. Make your case to that person, and mention any important reasons you may need the hold lifted quickly (upcoming bills, etc.). Even if the manager can't lift the hold altogether, they may be able to free up a larger portion of the deposit right away. You'll have a better chance of getting your way if you have a long history with the bank, always keep a sizable balance, and haven't made a habit of overdrafting your account.
You'll also want to hang onto receipts from the deposit. That way, if any mistakes happen during the money transfer, you'll have proof about the amount you're owed.
How can you avoid holds?
If you're worried about holds, there are strategies for managing a checking account to avoid them. If you can manage to make your deposit in cash, that deposit will clear much quicker than a check deposit. If you have to make the deposit with a check, keep in mind that smaller checks will clear much quicker.
If you can, ask for a cashier's check instead of a personal check. Cashier's checks have an extra level of security to them, since the funds are guaranteed. There may still be a hold on the deposit, but it probably won't be as long of a hold as you'd experience with a personal check.
An automated clearing house transfer, or ACH payment, is perhaps the quickest way to get your money. This is usually what employers will use for payroll deposits. If you're expecting a large payment, ask for an ACH transfer. Depending on the banks involved, there may be a small delay during the processing period, but you can usually expect to have the money available in your account within a single business day.
How holds protect consumers
While they sometimes cause headaches, account holds are actually a benefit for you. They protect you from overdrafts. Those occur when your withdrawal exceeds the money that's available in your account. Overdrafts usually come with extra fees attached, in addition to repaying the overdraft amount. There are other ways to avoid overdrafts, like using a card linked to an eligible account for overdraft protection. But for the bank, placing a hold on the deposit is the easiest way to ensure customers don't spend money they don't have.