Timing of cheques?
January 4, 2011 4:50 PM Subscribe
I am trying to balance my needs with the needs of someone who is paying me. If you deposit a cheque on (for example) a Tuesday before the end of the business day, will it come out of the other person's account on the same day, or the next day?
Please assume we're talking about two different banks, both Canadian. Thanks!
Please assume we're talking about two different banks, both Canadian. Thanks!
Best answer: My experience (2 different Canadian banks involved) has been that the timing ranges from same day to (up to) two business days later. There is no rhyme or reason, as far as I can tell. It may simply depend on how many transactions a given bank is processing at any given time, as well as on the speed at which transactional information is updated.
posted by YamwotIam at 5:04 PM on January 4, 2011
posted by YamwotIam at 5:04 PM on January 4, 2011
Best answer: Random, but definitely can be (in the US, at least) same day. I've always had money immediately when I deposit a check, and I recently gave someone a check and had money taken from my account on that day. If [bad things] won't happen if you don't deposit that day, and [bad things] will happen if money is taken from their account that day, then I would try to hold off, even if it is slightly inconvenient.
posted by anaelith at 5:10 PM on January 4, 2011
posted by anaelith at 5:10 PM on January 4, 2011
Best answer: I've worked at two of the big Canadian banks.
From my experience you can typically expect a cheque to take at least a day to clear under the circumstances you describe (written on one bank and deposited at another) but you can't count on it happening every time.
If your timing is good (or bad depending on your point of view) and the cheque gets deposited in such as way as to get sent out in the early clearing, then there is a chance the funds can be taken from the person's account on that same day.
In reality, don't count on protecting the needs of the person paying you. If you're owed the money, then you need to be concerned about getting it and doing so in a timely fashion. If you employer writes a cheque, s/he should have the funds to cover the cheque in the account (or have overdraft protection). It really shouldn't be your problem.
posted by sardonyx at 5:20 PM on January 4, 2011
From my experience you can typically expect a cheque to take at least a day to clear under the circumstances you describe (written on one bank and deposited at another) but you can't count on it happening every time.
If your timing is good (or bad depending on your point of view) and the cheque gets deposited in such as way as to get sent out in the early clearing, then there is a chance the funds can be taken from the person's account on that same day.
In reality, don't count on protecting the needs of the person paying you. If you're owed the money, then you need to be concerned about getting it and doing so in a timely fashion. If you employer writes a cheque, s/he should have the funds to cover the cheque in the account (or have overdraft protection). It really shouldn't be your problem.
posted by sardonyx at 5:20 PM on January 4, 2011
Wait, you're in Canada? Tell your payer to send you the money via Interac. Last I checked, this is free, and you get the money THE MOMENT YOU CLICK on the link in your e-mail. That way, if you need the money Friday, and they said not to deposit til Thursday, and you're worried the check'll take two days and come in Monday, then they can just send you money online on Thursday or Friday and blammo, it's there instantly!
Here is a list of participating financial institutions.
God, I miss the Canadian banking system.
posted by Grither at 5:53 AM on January 5, 2011
Here is a list of participating financial institutions.
God, I miss the Canadian banking system.
posted by Grither at 5:53 AM on January 5, 2011
Best answer: I am with the others - it could be taken out the same day depending on how your banks are set up. Going electronic could help, but it would have to be a joint endeavor.
You are so nice to worry about this - in my opinion it's the person writing the check that should worry if they can cover it, and if they can't they shouldn't write it. Depending on the situation see if you can work something out that makes you less anxious - if it is an employer who should be paying you don't worry about it, if they're professional they'll be covering their checks. If it is a friend who is giving you money out of goodwill, try to work out a different schedule so both of you can breathe a little easier. Like Grither suggested, if their money doesn't clear til Thursday, then really they shouldn't shoot you a link (or give you the check) until Friday.
posted by Lt. Bunny Wigglesworth at 4:45 PM on January 5, 2011
You are so nice to worry about this - in my opinion it's the person writing the check that should worry if they can cover it, and if they can't they shouldn't write it. Depending on the situation see if you can work something out that makes you less anxious - if it is an employer who should be paying you don't worry about it, if they're professional they'll be covering their checks. If it is a friend who is giving you money out of goodwill, try to work out a different schedule so both of you can breathe a little easier. Like Grither suggested, if their money doesn't clear til Thursday, then really they shouldn't shoot you a link (or give you the check) until Friday.
posted by Lt. Bunny Wigglesworth at 4:45 PM on January 5, 2011
Best answer: My experience is based on US banks, but I think that Canadian ones are substantially similar.
Short answer is that you don't know, without getting a knowledgeable person at the bank (probably someone who works with or has access to their core systems) to see how checks from that bank are cleared.
It used to be that if you deposited a check in a bank that it wasn't drawn on, then the check would get sent out to a Federal Reserve clearinghouse, where the banks would settle their accounts, and then the money would get taken out of the drawer's account. This was originally done by actually moving the pieces of paper around (so that a check drawn against a bank on the other side of the country might take a bit longer than "local" checks drawn on a bank in the same Fed region), but now that it's been automated I think much of the difference has gone away. I think it generally still takes overnight, though.
The Fed charges banks a not-insubstantial fee for check clearing. As a result of this, many banks have come up with alternatives to the Fed for check clearing. Two banks which have a large number of checks drawn on each others' accounts might get together and agree to start working more directly. Basically they'll each tell their computers to intercept "outclearing" (deposited but drawn on another bank) checks with certain routing numbers, and instead of sending them to the Fed, send them to a private clearinghouse or to the other bank directly. (The banking term for this is "correspondent banks.") About 43% of US checks are handled outside the Fed system, either directly between banks or by private clearinghouses, or because they're "on us" checks drawn on the same bank that they're deposited into (bank consolidation has made this very common).
If two correspondent banks have their computers set up appropriately, it's possible that the debit could occur from the drawer's account very quickly. Of course, it could also happen the next day (if they batch-process everything after COB everyday, which is still not uncommon in banking) or later. There's really no way to tell. There are maximum amounts of time that checks have to be processed in, but no minimums, at least not that I'm aware of.
My bank periodically sends me disclosure documents letting me know what ACH routing numbers they're handling directly, but I don't know if this is legally required or merely a courtesy on their part. I certainly don't pay attention to it.
Anyone writing checks today who is expecting any sort of float is wrong, period. There are a bunch of ways that checks can get converted to electronic transactions or handled electronically, which can take the usual overnight or several-day float down to practically nothing. You should always treat a check just like a debit-card transaction (with a nasty overdraft fee) and assume that the money is gone the second the ink hits the signature line.
posted by Kadin2048 at 7:17 AM on January 6, 2011
Short answer is that you don't know, without getting a knowledgeable person at the bank (probably someone who works with or has access to their core systems) to see how checks from that bank are cleared.
It used to be that if you deposited a check in a bank that it wasn't drawn on, then the check would get sent out to a Federal Reserve clearinghouse, where the banks would settle their accounts, and then the money would get taken out of the drawer's account. This was originally done by actually moving the pieces of paper around (so that a check drawn against a bank on the other side of the country might take a bit longer than "local" checks drawn on a bank in the same Fed region), but now that it's been automated I think much of the difference has gone away. I think it generally still takes overnight, though.
The Fed charges banks a not-insubstantial fee for check clearing. As a result of this, many banks have come up with alternatives to the Fed for check clearing. Two banks which have a large number of checks drawn on each others' accounts might get together and agree to start working more directly. Basically they'll each tell their computers to intercept "outclearing" (deposited but drawn on another bank) checks with certain routing numbers, and instead of sending them to the Fed, send them to a private clearinghouse or to the other bank directly. (The banking term for this is "correspondent banks.") About 43% of US checks are handled outside the Fed system, either directly between banks or by private clearinghouses, or because they're "on us" checks drawn on the same bank that they're deposited into (bank consolidation has made this very common).
If two correspondent banks have their computers set up appropriately, it's possible that the debit could occur from the drawer's account very quickly. Of course, it could also happen the next day (if they batch-process everything after COB everyday, which is still not uncommon in banking) or later. There's really no way to tell. There are maximum amounts of time that checks have to be processed in, but no minimums, at least not that I'm aware of.
My bank periodically sends me disclosure documents letting me know what ACH routing numbers they're handling directly, but I don't know if this is legally required or merely a courtesy on their part. I certainly don't pay attention to it.
Anyone writing checks today who is expecting any sort of float is wrong, period. There are a bunch of ways that checks can get converted to electronic transactions or handled electronically, which can take the usual overnight or several-day float down to practically nothing. You should always treat a check just like a debit-card transaction (with a nasty overdraft fee) and assume that the money is gone the second the ink hits the signature line.
posted by Kadin2048 at 7:17 AM on January 6, 2011
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Call your bank, but I doubt you'll get your money before Monday.
posted by Admiral Haddock at 4:57 PM on January 4, 2011