A couple of weeks back, a client gave me a check. I waited a couple of days before depositing it, but during that time, the client’s account got hacked, and their bank suggested they open a new one. Without checking if the check had cleared, my client closed their account and didn’t let me know. So, when I deposited it, the check bounced.
I let the client know, and they gave me a new check, but now, every check I deposit has a 5 to 7-day hold. Is this something temporary my bank is doing to my account, or could this be a permanent change?
Since you deposited a bad check, even if it wasn’t intentional, it can affect the trust level with your bank. They might keep the holds in place for a while, but if your account stays problem-free, it should eventually go back to normal. However, it’s up to your bank to decide.
According to Reg CC, banks can put an exception hold on deposits if the account had several overdrafts or certain negative balances within the past 180 days.
They’re holding the check because it’s from the same person who had the first one bounce. They want to be sure it’ll clear this time.
Depositing a bad check does mess with the system’s algorithm and has a lasting effect, even if it wasn’t intentional. It’s frustrating, but it’s part of the risk for banks, and why they’re careful with bounced checks.
Banks track all your deposit activity, including any bounced checks or overdrafts, and they keep this data for a full year, rolling it over month by month. The holds might be based on your account’s recent history, but other factors can come into play too.