However, you still owe the money, and banks can choose to process the payment. Checks https://x.com/BooksTimeInc that remain outstanding for long periods of time can’t be cashed, as they become void. Outstanding checks that remain so for a long period of time are known as “stale” checks. Some checks become stale if dated after 60 or 90 days, while all become void after six months. A personal check that’s several months old may have been forgotten by the issuer.
Outstanding Check: Definition, Risks, and Ways to Avoid
While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service. Typically, banks print the words “void after X days” on cashier’s checks that can go stale. If you’ve found a “forgotten” cashier’s check, look for this disclaimer. After the expiration date, the bank may consider the funds unclaimed property and transfer them to the state in a process called escheating2. However, you can still contact the bank and request a replacement for a stale cashier’s check. When somebody pays you by check, they expect you to deposit the check soon.
Checking account vs. savings account
- If a check remains outstanding for an extended period, it may become stale-dated, and the bank may refuse to honor it.
- Banks don’t have to accept checks that are more than six months (180 days) old.
- It allows you to streamline check management and avoid stale-dated check issues altogether.
- Learning how to set up direct deposit for regularly recurring deposits like payroll checks could make life a little easier—and give you one less item on your to-do list.
- Traveler’s checks might not ever expire, and can always be refunded if lost or stolen.
A cashier’s check is essentially a check drawn on the bank’s own funds. Certified checks are personal checks from a bank account and guaranteed by the bank. They typically don’t expire but are often subject to state unclaimed property laws. The payor must be sure to keep enough money in the account to cover the amount of the outstanding check until it is cashed, which could take weeks or sometimes even months.
How To Write a Check: A Visual Guide
One of the ways of making payment for a transaction is by 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 bank receives the full amount requested, it deposits it into the payee’s account. The person who issued the check can also contact the bank to verify that the check will not be accepted beyond its expiration. A stop payment order is a formal request to cancel a check that has not been processed.
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. While personal and business account checks expire after 180 days, stale dated checks other types of checks can have different expiration dates. U.S. Treasury checks expire one year from the date they were issued. However, if you miss the expiration date on a government-issued check, don’t worry. Contact the federal agency that authorized the Treasury check and request a replacement1.
- State and local governments may set their own expiration dates, so if you lose the check or more than six months have gone by, it’s best to contact the agency that sent it to you.
- After a certain period, the business must report and escheat the funds to the state as unclaimed property.
- However, the institutions and companies that issue them may have rules determining when unused money orders become considered abandoned property.
- Ask for a new check if the old one is past the six-month mark.
- While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
- Other types of checks can take longer to expire or may not expire at all.
- One of the ways of making payment for a transaction is by check.
In this context, an outstanding check need not be outstanding for long; it may simply be the short period of time between when a check is mailed and when it is received. It is at the discretion of the individual bank to choose whether or not to cash or deposit an old check. If the bank is familiar with the issuing account and knows that the account holder can support the check balance, the bank can choose to deposit or cash the check anyway. So, although banks can still honor old checks, honoring them is determined on a case-by-case basis. If somebody fails to deposit or cash a check you wrote, they may have difficulty negotiating the check after six months.
What Happens If You Cash An Expired Check?
Unless you have a government-issued check or certified check, it’s wise to deposit checks within six months. Doing so prevents confusion at the bank and lets the check writer know that you’re ready https://www.bookstime.com/nonprofit-organizations to collect your money. A personal or business check that’s older than six months is technically considered stale, but that doesn’t mean it’s void, a bad check or that your bank won’t honor it.
What Are Some Best Practices for Managing and Clearing Outstanding Checks?
Due to the popularity and ease of electronic payment and cash transfer apps, the use of paper checks is slowly declining. Despite this decline, paper checks are not yet obsolete, so there might be an instance in which you have to write, cash or deposit one. Because it can be a good practice to cash or deposit checks soon after receiving them, you may want to consider direct deposit. Learning how to set up direct deposit for regularly recurring deposits like payroll checks could make life a little easier—and give you one less item on your to-do list. When a check is stale-dated, the recipient of the check will need to inform the issuer of the check and request that they provide them with a new check for the payment.
