The time it takes for a check to clear depends on the nature of the deposit and the underlying bank’s policies. When banks process checks, the funds are taken from the issuer’s checking account and sent to the recipient’s account. The receiving bank requests the funds from the issuer’s bank, and if the funds are available, the check clears in roughly one to two business days.
Processing times depend on the bank’s district regulations. Most commercial banks credit deposits on the same business day if the deposit is made before the bank’s displayed branch or ATM cut-off time. Funds are also credited on the same business day if the deposited check is from the same bank.
For all other deposits, banks are required to make a portion of the deposit available right away. The funds are not debited from the issuer's account instantaneously, but a portion is credited to the recipient as a sign of good faith.
Check-clearing times also depend on reviews or temporary holds. A bank’s general policy is to make deposited funds available on the first business day after they receive the deposit, but in some cases, a bank can place a temporary hold on the funds. These holds are placed on accounts with frequent overdrafts, relatively new accounts or high dollar deposits that exceed the account's total available balance.
Bank processing time has been greatly reduced with the enactment of the Check Clearing for the 21st Century Act on Oct. 28, 2004. This law enables payees to submit digital images of checks to banks for payment. The "Check 21" act was a direct result of problems transporting and clearing checks after the events of the September 11 terrorist attack.