Years ago, banks held funds for a much longer time and folks relied on the fact that it usually took several days for a check to be presented and paid. We used to call that float. Float doesn't really exist any more and banks are required to make funds avilable to you much quicker. Right now, the longest standard hold time is 5 days for an out-of-state bank and 2 days for a local bank, but later this year, that will be changed to a maximum of two days for all checks. Good news, right? Well, yes, for the most part it is, but there are some things you need to know about how this will affect the banking system and you.

Right now, the funds from a local check are made available to the depositor within two days and you can then withdrawal the money.  The problem is, even though the funds have been made available to you, the bank does not actually know if that check you put into your account is actually good for several days beyond the hold period. A good check will usually come back from the other bank within two or three days, but a bad check can take at least a week longer to be returned.

Here's how  typical check scam operation goes: You advertise something for sale at a stated price and a buyer comes along and buys its, sending you payment above the amount stated and asking you to return the difference to them. This difference is often fairly substantial such as two or three times your asking price. Since the scammers are usually well aware of the time involved with a bad check, thay are counting on you to pull the funds out of your bank to send them the difference as soon as the check 'clears'. The problem is, of course, that though the funds may be available, that check may never actually clear.

Though most folks aren't aware of it, banks do have some options regarding the length of check holds for deposits and if they have reason to suspect a cehck may have problems, thay can place longer holds on the funds. A well-trained teller might note that there could be an issue, but I wouldn't want to count on that. Be upfront with our banker and let them know what the situation behind the check is, so they can treat it properly and protect you from being scammed.