What Is A Funds Availability Policy?

May 18, 2016

You just got paid and several large monthly bills are about to come out of your checking account, but luckily you just deposited your check in the nick of time! No worries, right? Wrong. If you’re not familiar with your bank’s funds availability policy, you could be in for a surprise.

Funds availability comes into play when you deposit a check from a customer of another bank into your bank account. In this scenario, it takes your bank some time before it receives the funds (aka amount of the check) from the other bank. While it is waiting for that to happen, it may place a hold on your check, meaning that those funds are not available for you to withdraw.

You may be asking yourself how long a bank can place a hold on your check. In 1987, Congress passed the Expedited Funds Availability Act (also known as Regulation CC) to establish maximum permissible hold periods for checks and other deposits. Because it only sets maximums, there can still be differences in hold times from bank to bank. Some banks have standard policies they do not deviate from, which can lead to longer holder periods. Others will consider the amount of the check, balance in your account, if you’re a long-time customer and how successfully you’ve maintained your account to reward you with same-day or next-day funds availability.

If you are thinking about switching banks, you’ll want to make sure you are familiar with the policy at the bank you are considering. All banks are required to display this information in the branch. At ENB our policy is simple and straightforward. Please contact us if you’d like to learn more. We’ll also be happy to tell you about our truly free checking account!