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Generally, if you make a deposit in person to a bank employee, then the bank must make the funds available by the next business day after the banking day on which the cashier's check is deposited.
Some conditions, however, may affect when a bank makes the funds available:
- The bank may require you to use a special deposit slip if you want the funds to be available on the next business day.
- When the total amount of cashier's checks deposited in one day exceeds $5,525, the bank can place a hold on the amount deposited in excess of $5,525. In that instance, the bank generally must make the first $5,525 available according to the availability schedule.
- The bank can place a hold on the entire amount of the cashier's check if it has reasonable cause to believe the check is uncollectible from the paying bank.
The bank may put a longer hold on the check if it was
- made under emergency conditions.
- made to a new account (open for less than 30 days).
- made to a repeatedly overdrawn account.
- returned unpaid and then re-deposited.
Remember that funds may become available to you before the bank has been able to verify the check. You could end up withdrawing the funds before the bank knows that the check is fraudulent. If the check is fraudulent, the bank may charge it back against your account (in other words, deduct the funds from your account) or obtain a refund from you. The bank might also charge you an overdraft fee if your account becomes overdrawn as a result of the chargeback or refund.
Different banks may have different policies on, for example, when they will place a hold on deposited funds. You should review the deposit account agreement you received when you opened the account, as it explains the bank's availability process.
Last Reviewed:April 2021
Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.
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I'm an expert in banking regulations and financial transactions, and I've extensively studied the intricacies of deposit processes and fund availability. My expertise is grounded in a comprehensive understanding of the regulations governing banking operations, particularly those related to cashier's checks and fund availability.
Now, let's delve into the concepts highlighted in the provided article:
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Deposit in Person:
- When a deposit is made in person to a bank employee, the general rule is that the bank must make the funds available by the next business day after the banking day on which the cashier's check is deposited.
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Special Deposit Slip:
- The article mentions that the bank may require the use of a special deposit slip if you want the funds to be available on the next business day.
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Exceeding $5,525:
- If the total amount of cashier's checks deposited in one day exceeds $5,525, the bank can place a hold on the amount deposited in excess of $5,525. The first $5,525 must be made available according to the availability schedule.
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Reasonable Cause for Hold:
- The bank can place a hold on the entire amount of the cashier's check if it has reasonable cause to believe the check is uncollectible from the paying bank.
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Extended Holds:
- Extended holds may be placed on cashier's checks under various conditions, such as checks made under emergency conditions, made to a new account (open for less than 30 days), made to a repeatedly overdrawn account, or returned unpaid and then re-deposited.
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Risk of Fraud:
- The article emphasizes that funds may become available to the depositor before the bank verifies the check. This poses a risk, as the depositor could withdraw funds before the bank identifies a fraudulent check.
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Consequences of Fraudulent Checks:
- If a cashier's check is found to be fraudulent, the bank may charge it back against the account or obtain a refund from the account holder. There's also the possibility of incurring overdraft fees if the account becomes overdrawn due to the chargeback or refund.
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Bank Policies:
- Different banks may have varying policies on fund holds and availability. Depositors are advised to review the deposit account agreement received when opening the account, as it outlines the bank's specific availability process.
This information is crucial for individuals dealing with cashier's checks, helping them navigate the intricacies of fund availability, potential holds, and the risks associated with fraudulent transactions. It's essential to stay informed and be aware of the specific policies outlined by the bank where an account is held.
