What does funds availability mean? (2024)

It’s probably happened to you at some point: You deposit a check and then…nothing. You look at your available balance every few hours and it stays the same each time.

What’s going on? The rusty wheels of the U.S. banking system at work.

Financial institutions can typically hold your deposit between one and five days, or even longer in special situations, which means you can’t cash out or spend the deposit until the hold is lifted.

What is funds availability?

Funds availability describes when you can spend or withdraw a bank deposit.

Banks may have varying funds availability policies, but must follow the guidelines set inFederal Regulation CC, aka Reg CC.

Reg CC serves as ground rules for banks when creating their own funds availability policies. These policies typically must be presented to you when you open an account, and can usually be found on the bank’s website.

Depending on the type of deposit you make, when the funds will be available may vary. The amount deposited can also have an impact on when you can withdraw or access the funds.

Why banks hold funds

Banks want to verify that the payor has enough dough. This not only serves to protect the bank, but it also protects you from spending money that you don’t have.

Subpart B of Reg CC details how long a bank can place a hold on your funds. Depending on the type of deposit, you should usually have access to the funds in your account between one and five business days of the deposit. The funds availability schedule breaks down as follows:

• Next business day. Cash deposits, wire transfers and certain check deposits, such as Treasury checks and cashier’s checks.
• Two business days. Local checks, or those deposited in a bank that is in the same Federal Reserve check-processing region as the paying bank.
• Five business days. Non-local checks, or those deposited in a different check-processing region than the paying bank.

Reg CC allows banks to extend hold periods on deposits in certain circ*mstances, but the bank must alert you if the hold goes longer for any reason. Reasons a bank might put a hold on your money for a longer period include:

• The account is new.
• The deposit is greater than $5,525.
• The account has been repeatedly overdrawn.
• Suspected fraud.
• Emergency conditions, such as a communications failure, suspension of payments by another bank or war.

How deposit holds work

Typically, at least a portion of the funds you deposit are available the same day you deposit. However, in the case of a deposit hold, you may not be able to access deposited funds for up to a week.

These holds are placed by banks to protect customers from fraud, overdrafts or fees that could occur if funds were made available immediately and the check has to be returned to you. Common factors that can increase the chances of a deposit hold can include:

• You’ve had more money withdrawn than there is credit (from an account).
• You’re new to the bank.
• Your deposit exceeds the total available balance in your account.
• You’ve deposited bad checks in the past.
• The bank has to verify the payor has enough money to cover the check.

The bank should notify you that a deposit hold has been placed on your account.

If the bank didn’t place a hold at the time of the original deposit but determines a hold is required afterward, the bank will usually send an alert via email or a paper notice to your mailing address.

Understanding your funds availability policy

All banks must disclose their funds availability policy to customers once they open an account. These policies are usually available on the bank’s website, or by asking a customer service representative.

The bank’s policy will clearly outline when funds will be available based on the type of deposit, such as cash or money order, as well as the deposit method (branch deposit, ATM or mobile deposit).

Frequently asked questions (FAQs)