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The bank placed a hold on a cashier's check that later turned out to be fraudulent. Aren't cashier's checks supposed to be honored immediately?

Generally, if you make a deposit in person to a bank employee, then the bank must make the funds available by the next business day after the banking day on which the cashier's check is deposited.

Some conditions, however, may affect when a bank makes the funds available:

  • The bank may require you to use a special deposit slip if you want the funds to be available on the next business day.
  • When the total amount of cashier's checks deposited in one day exceeds $5,525, the bank can place a hold on the amount deposited in excess of $5,525. In that instance, the bank generally must make the first $5,525 available according to the availability schedule.
  • The bank can place a hold on the entire amount of the cashier's check if it has reasonable cause to believe the check is uncollectible from the paying bank.

The bank may put a longer hold on the check if it was

  • made under emergency conditions.
  • made to a new account (open for less than 30 days).
  • made to a repeatedly overdrawn account.
  • returned unpaid and then re-deposited.

Remember that funds may become available to you before the bank has been able to verify the check. You could end up withdrawing the funds before the bank knows that the check is fraudulent. If the check is fraudulent, the bank may charge it back against your account (in other words, deduct the funds from your account) or obtain a refund from you. The bank might also charge you an overdraft fee if your account becomes overdrawn as a result of the chargeback or refund.

Different banks may have different policies on, for example, when they will place a hold on deposited funds. You should review the deposit account agreement you received when you opened the account, as it explains the bank's availability process.

Last Reviewed: October 2020

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.

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