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Banking: do checks clear every night of the year?

Discussion in 'Society and Culture' started by Greg, Jan 14, 2012.

  1. Greg

    Greg Full Member

    I haven't been able to satisfy my question using Google.

    As far as I can tell, checks drawn on my account clear sometime after midnight. I go to bed and they're not cleared. Next morning when I wake up some may have cleared.

    I can't recall though if this happens overnight Saturday night to Sunday morning, or overnight to the next morning if the day is a holiday. It seems to me that they don't, and that you'll see checks posted as cleared only if the previous day was Monday-Friday and not a holiday.

    In other words today is Saturday and Monday is MLK day so the next chance to see a check cleared and posted to my account is Tuesday morning, right?
     
  2. Arc

    Arc Full Member


    Paper checks are processed and or cleared only on days when the FED is open. So that would be Monday through Friday excluding holidays. Also don't confuse checks posting or being debited to your account as the same day of the processing. All though it is very possible for a check to be processed and posted to your account all in one business day with the passing of Check 21 which affected how checks were processed. Here is a good site to answer your questions:

    http://www.federalreserve.gov/paymentsystems/check21_faq.htm

    The most common scenario of the processing of checks is they are processed on a business day and posted/deducted the next day from your account. So in most cases, not all, checks are processed Monday through Friday and posted Tuesday through Saturday.

    Finally keep in mind that business day hours are set by the bank. They vary bank by bank but the most common is the cut off time for a business day paper transaction is commonly 4 PM M-Thu and 6 PM on Fridays.

    That means if you deposit a check in your bank on Monday before 4 PM it will be processed on Monday and posted on Tuesday. However if you deposit it after 4 PM no matter how much longer after that hour the bank is open the check will be processed or treated as if you deposited it on Tuesday and it will not post Wednesday. Where you can really be affected is if you deposit a check on Friday after the cutoff time. The bank will treat if has being deposited on Monday and it will not be processed and credited or debited to your account until Tuesday. A rude surprise to some people.

    To answer your specific question you are depositing a check on a Saturday, a non-business day, and Monday is Federal Holiday so the check will be treated as deposited on Tuesday and not be posted to your account until Wednesday.

    The various types of electronic transactions are a whole different world than the above.
     
  3. Greg

    Greg Full Member

    Thank you for the reply! :)

    My concern is a debt that I paid using my own personal check and I'm nervous that it went through the system okay. I expected it would have cleared my account about a week ago. My payment is subject to a late fee although I paid it even before it was due. I was offered a receipt and I'm kicking myself now because I declined. I've always figured my canceled check was sufficient receipt. I realize now there is a gap in my logic, that if the recipient lost the check and doesn't remember that I paid then I'm SOL and subject to a late fee, and the only ways I can prove I paid is (1) recipient remembers getting paid, (2) check clears through my account, or (3) getting the receipt I stupidly declined.

    Needless to say I'm always going to get a receipt in the future. And I guess I'll just be on tenterhooks until Tuesday morning at best. I'm getting a sore knee and a sore ass from kicking myself. If I had the damned receipt I could spend the weekend enjoying things instead of worrying myself sick.


    I probably should have asked "do checks post?" instead of "do checks clear?" This isn't really about when the check cleared the system. It's all about when I'll find out that all is okay. All about when I see that it's posted to my account as paid.
     
  4. Sierra Mike

    Sierra Mike The Dude Abides Staff Member

    Your commercial bank depends upon the Fed's Check division to process the check before it can be cleared. Check closed in FRB-NY years ago. I think it's still active in Minneapolis.

    I would recommend you accept whatever receipt is offered in the future. Never leave your options with the Fed.
     
  5. Arc

    Arc Full Member

    In most cases it is best to avoid paper checks if you have an option of paying through online banking through online bill pay or some such function. If the latter is the option it is the only way to go. It immediately takes the funds out of your account, provides a detailed precise permanent record of the transaction, and if should there be a question of the payee not getting the check or not getting it in a timely manner most major banks will act to resolve the issue quickly and efficiently with no charge to you.

    Even if you for some reason you choose to issue a check you can still write a conventional check or depending upon time constraints better yet have the bank issues a check on your behalf through online banking should the conventional electronic bill pay feature for a payee not be available.

    With rare exceptions, conventional paper checks are the choice of last resort.
     
  6. Greg

    Greg Full Member

    Almost everything I do goes electronically. In this one case it's not an option. I'll get a receipt from here on in, and then if they lose the check I won't be left hanging out. Thanks.
     

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