Banking on a Clear Check: Factors That Impact How Quickly Your Check Will Clear

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If you’ve ever waited in the teller line at your bank and watched checks shuffle back and forth, you might have wondered how long it takes to clear a check. Here are a few factors that impact how quickly banks can clear checks.

Federal and State Laws

State laws and regulations vary, so there is no single answer to this question. Federal rules mandate that banks have to clear checks within three days of receiving them. However, banks do not have to process the check until they receive it. So there may be a lag time before your bank clears the check.

State Bank Policies

State bank policies can differ and might include the number of business days it takes to clear checks. For example, some banks will process checks from out-of-state companies up to six business days after receiving them, while others will take two business days.

The Size of The Check

If the check is for an amount less than $15,000 and does not have any stops placed by the bank, it should clear within 3-5 business days. If the check is for an amount greater than $15,000, it may take up to 7-10 business days.

Payment Types

The type of check you wrote depends on the bank the payee has an account with and whether or not there is a stop payment order in place. Institutions may also clear checks days before time if you set up an early direct deposit.

Where You Live

Checks drawn on local banks in your area can take 1-2 business days to clear. If you live in a metropolitan area, your bank may have more resources and technology to handle checks quickly. But if you live in a rural area, your bank might not have the resources or infrastructure to clear checks quickly.

Your Bank Account Type

Personal and business checking accounts usually clear within two to three days, while small-dollar commercial accounts may take five to seven days. Corporate accounts are typically cleared in one day unless there is a hold on the account. In addition, how much you have in your account affects how quickly your checks will be cleared—as does whether or not you’re the person writing the check.

Whether There Are Outstanding Checks Against Your Account

If there are any outstanding checks against your account, they can take up to 4-5 business days to clear.

Amount of Money in Your Account

Banks also have different rules for how much cash is needed in an account before they’ll issue a check. Some require at least $1,000 in the account, while others allow as little as $300 or $500. If you have an average balance of $500 in your checking account, the bank will typically credit the proceeds of the cleared check within 1-2 business days.

The Number of Checks Written in Your Name at Any Given Time

If you have two checks written in your name, it will take two to four days to clear. But if you have five or more checks out there at any given time, it can take up to seven days for the banks to process them all and make sure they’re all legitimate.

As per the experts at SoFi, “In addition to early paycheck, members with qualifying direct deposits are eligible for no-fee Overdraft Coverage, our highest APY, plus a $100 cash bonus.” If you are new to the account or there is some questionable activity associated with it, it could take up to 5 days for your check to clear.