How Long Does It Take for a Check to Clear

How long does it take for a check to clear? Even though using a check as a form of purchasing goods and services is losing popularity, there are still many times when writing a check is better than relying on cash or instant debit. As long as the check writer understands how the process of writing a check works, there should be no need to worry about how long it takes for a check to clear. A money order, though it looks similar to a check, usually clears instantly, as long as the sender understood how to fill out a money order correctly.

How Checks Work
A check works like a voucher, allowing a buyer to present a piece of paper to represent money. The merchant will then trade the paper check for goods or services. The merchant must deposit the paper check in his bank, and then the bank contacts the buyer's bank to transfer the funds. Before the 1970s, it could take many days or even weeks for funds to clear. However, with modern technological advancements, such as the Internet and electronic check payments, the time between presenting a voucher for goods or services and funds actually being transferred has shortened considerably.

Cashing Checks
Most checks clear within two business days of the transaction, but that period can be longer depending on the specifics of the two banks and their policies. Electronic check cashing or electronic check conversion is a growing trend and is quickly replacing the traditional check cashing method for retailers. With electronic check conversion, the information about the buyer's bank account is taken from the check, then used to make a nearly instantaneous funds transfer from one bank to the next. With electronic check conversion, there is no waiting period between when the check is written and when the funds are withdrawn.

The time between when the check is presented to the retailer and when the funds are actually transferred out of the buyer's account is referred to as the "float" period. It's possible for someone to write a check on a day where there are insufficient funds in the account. The buyer then has a day or two to gather the funds and put them in the account. This float time for checks can lead to check fraud, where a buyer purchases goods with a check, and then by the time the check is rejected by the bank for insufficient funds, the buyer is long gone with the merchandise. 

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