Cashing Old Checks: How Long Is A Check Good For?
In either case, banks are under no obligation to accept a check once it is deemed stale. Some banks may do it, but they may charge a fee for depositing or cashing a stale check that is older than 6 months. That is why a person should carefully look at any check they have been given and make sure that it is not already stale. A person should know how long they have to cash or deposit the check before it becomes too old. They should act within that time period – to deposit or cash the check. Depending on the circumstances, a bank may refuse to honor the check and will not allow the person to deposit or cash the check.
Paying by cheque
Some stale checks may be handled under what are known as escheatment laws. The company may be willing to reissue the check or make an electronic payment. If you haven’t had any luck contacting the check issuer, consider working with your bank. Uncashed checks to vendors, contractors, payroll, and shareholder dividends are all potential unclaimed property. There are a few things a person can do to prevent a stale check from being honored by a bank.
Get electronic alerts from your financial institution
It can contribute to better bookkeeping and accounting processes by keeping everything organized. A memo kind of serves as a reference for what you are providing the cheque for. One of the biggest challenges with a physical cheque is keeping track of where it is. It can be easy for it to get lost somewhere or thrown away with other garbage or recycling by accident.
Give the check writer a heads-up
- On your reconciliation sheet, outstanding checks are often subtracted from your balance per bank because these withdrawals have not yet happened but are simply a timing matter.
- Someone else could be able to change the payee name or the amount if a check is misplaced or stolen before it is taken to the bank.
- Before trying to cash a stale-dated check, it might be a good idea to contact the bank that holds the account the check is drawn against to see what its policy is.
- This could lead to the check being returned and you possibly owing a bank fee.
- If you are a business owner who has written a check that has never been cashed, it doesn’t mean that the money reverts back to you.
As the rightful owner of these funds, the state should hold them in case you claim them. The US Uniform Commercial Code (UCC) specifies that banks are not obligated to cash a bookkeeping check more than six months old. Another solution is to contact the person or business that wrote the check and ask them if they would issue another check to replace the stale one.
Counter-signed cheques
As a small business owner, you should be writing checks from your business vs. personal bank account. The bank can choose not to honor it if it’s older than six months. If your bookkeeper or accountant sees that you have issued a check that’s approaching expiration, you should contact the other business or person and encourage them to cash the check.
- Generally speaking, a bank is not required to accept or cash a stale-dated check that it receives.
- The only exception to stale-dating may be a certified check, which must be honored, even after 180 days.
- Depending on the circumstances, a bank may refuse to honor the check and will not allow the person to deposit or cash the check.
- With accounting software like QuickBooks Online, you can accept payments anytime, anywhere.
With accounting software like QuickBooks Online, you can accept payments anytime, anywhere. It allows you to streamline check management and avoid stale-dated check issues altogether. Some banks may deposit checks if they have reason to believe that the issuer is legitimate and the company has enough funds in its account to cover the check. A bank will, in good faith, do all it can to stop payment on a check, but a bank will not guarantee that the check will not be processed. If the stale check is returned for any reason, then a person’s bank may charge a fee for returning the check to the person. They may then reverse the deposit if the stale dated definition funds were not placed on hold.
Post-dated cheques
You can also call or write to remind the payee that the check is outstanding. If they haven’t received the payment, this may nudge them to notify you to reissue the check. A check is a financial instrument that authorizes a bank to transfer funds from the payor’s account to the payee’s account. When the payee deposits the check at a bank, it requests the funds from the payor’s bank, which, in turn, withdraws the amount from the payor’s account and transfers it to the payee’s bank. When the bank receives the full amount requested, it deposits it into the payee’s account. The best thing that you can do is keep track of all the cheques you have issued, and make a note of whether or not they have been cashed or not.