Availability of Funds Deposited
Into Bank and Credit Union Accounts
Federal Regulation CC, "Availability of Funds and Collection of Checks," establishes availability schedules under which banks - for purposes of this regulation, "bank" means insured banks or credit unions - must make funds deposited into transaction accounts (bank checking accounts and credit union share draft accounts) available for customer withdrawal.
Definition of Terms:
- Date of deposit is determined by an institution's "cutoff" time for the close of business. Deposits made after that cutoff time are considered made on the next banking day.
- A Business day is every day except Saturday, Sunday or a federal banking holiday. Even if the institution is open on weekends, these days are NOT considered business days for hold purposes.
- A Banking Day is a business day in which an institution is open to the public for carrying on substantially all of its banking functions.
Institutions may adopt policies of availability for deposits of "Next-Day" or "Regular":
Next-Day Availability - all deposits available next Business Day after Banking Day Date of Deposit
Regular Availability - second Business Day after Banking Day Date of Deposit
- Cash, Electronic Direct Deposits and Wire Transfers (incoming) must be available the Next Business Day. Cannot be held.
- On-Us Check must be available the Next Business Day. Can be held if not deposited at a brick-and-mortar branch of the bank.
- U.S. Treasury Check must be available the Next Business Day. Can be held if not deposited in an account held by a payee.
- U.S. Postal Money Order; Checks drawn on a Federal Reserve Bank or Federal Home Loan bank; Checks from a State or Local Government; Cashier's, Certified, or Official Checks must be available the Next Business Day. Can be held if not deposited in person or in an account held by a payee.
- Regular Availability (Other Checks) must be available on the Second Business Day. Can be held.
The $225 Rule states that the first $225 of deposits made on any banking day must be made available the next business day. This $225 is in addition to the amount of any next-day availability items.
Institutions may place a hold on certain deposits to delay availability. There are two basic types of holds: Case-by-Case and Exceptions.
- Case-by-Case - A case-by-case hold allows an institution that has established a next-day availability policy to hold personal or business checks up to the regular schedule. The institution must provide a hold notice to the account holder of account number, date of deposit, amount being held, and the date funds will be available. READ YOUR DEPOSIT RECEIPT to check for notice of a hold.
- Exception to Regular Availability (Second business day after date of deposit) - To delay availability up to the 7th business day after the date of deposit, one of six reasonable cause exceptions must apply: The institution must provide a hold notice that contains: account number, date of deposit, amount being held, time period within which the funds will be available, and reason for hold.
New Account - the account is opened less than 30 days ago, no other accounts over 30 days old in the institution, $225 rule does not apply.
Large Deposit - the total of deposits on a single banking day exceeds $5,525. Although the first $5,525 of any items must receive the availability otherwise provided for checks, the amount in excess of $5,525 may be held according to the large deposit exception.
Repeated Overdrafts - repeatedly overdrawn during the last six months (overdrawn six or more days in a six-month period, or two or more days in an amount over $5,000).
Redeposited Check - check has been previously returned unpaid.
Reasonable Cause to Doubt Collectability – Institution has information to believe an item may not be paid: The paying bank reports the item will not clear; there is a stop payment order on the item; the item is stale-dated (more than 6 months old); the depositor’s account has been flagged for suspicious activity,
Emergency Conditions - Natural disasters, power failures, computer failure, war or terrorism.
Federal Reserve Consumer Help
PO Box 1200
Minneapolis, MN 55480