What Are Stale-Dated Checks?

If the business owner fails to deposit his business checks in the bank within the https://www.bookstime.com/ notified time on them, they become stale. An important point here to note is even if these checks become stale, it does not imply they have become void and cannot be encashed. The only condition in this situation is the financial institution has a right over the refusal of the check.

Can you cash a stale-dated check?

Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. A lawyer can help you understand your rights and what actions you can take to protect yourself. If you have any questions or concerns, it’s always best to speak with a lawyer before taking any action. Now, let’s dive deep into understanding a stale-dated check and how it functions.

Stale Checks

An outstanding check also refers to a check that has been presented to the bank but is still in the bank’s check-clearing cycle. Do personal checks expire more quickly than company-printed checks? A personal check that’s several months old may have been forgotten by the issuer. Practically all checking accounts have zero interest, meaning most people only keep just enough in the account to pay the bills.

Watch out for ‘deposit item returned’ fee

Money orders generally don’t expire, but some issuers may charge a fee if the payee doesn’t cash it within a certain time frame. Treasury (a federal tax refund, for example) are good for 12 months after the date they’re issued. A check from a state government is generally valid for six months to a what is stale dated check year, though that can vary by state. A money order is a type of check where the issuer provides the funds upfront, and the money is therefore guaranteed.

• Before trying to cash or deposit an outdated check, consider reaching out to the check writer and ask for a replacement check.
• The bank also can simply bounce the check without even trying to reach out, which means the depositor may get hit with a „deposit item returned” fee that can be up to $30 or more.
• Uncashed checks that are outstanding for over six months are considered stale.
• U.S. Treasury checks expire one year from the date they were issued.
• A personal check that’s several months old may have been forgotten by the issuer.
• Whether or not that restriction is valid depends on several factors.

Pay your team

• Instead, you will need to ask that the issuer of the check provides you with a new check for the purpose of the payment.
• Each bank has its own check hold policies, check endorsement requirements, and clearance period.
• Best practices for managing and clearing outstanding checks include regular bank statement reconciliation, promptly voiding or canceling unused checks, and maintaining proper record-keeping.
• According to the official definition, stale-dated checks are those checks which are at least 6 months that are 180 days old.

Once he has identified the checks that are approaching the six-month mark, he can easily contact the concerned recipient and ask him to collect the funds with appropriate bank procedures. As a small business owner, you should be writing checks from your business vs. personal bank account. The bank can choose not to honor it if it’s older than six months. If your bookkeeper or accountant sees that you have issued a check that’s approaching expiration, you should contact the other business or person and encourage them to cash the check. If they’ve lost the check, stop payment on it and issue a new one. A stop payment informs your bank that you do not want the check cashed and essentially voids the check.

• Of course, depending on the situation, purpose of payment, and circumstances surrounding not processing the check in a timely manner, this may be easier than in other instances.
• For example, Western Union charges fees to money orders after one to three years.
• Depending on various factors, the expiration time for a cashier’s check can range from 60 days to never.
• Before trying to cash a stale-dated check, it might be a good idea to contact the bank that holds the account the check is drawn against to see what its policy is.
• Each state has its own requirements, such as a minimum dollar amount or a minimum length of dormancy.

Hence, an employer must consult with a bank professional before trying to encash the stale-dated checks and understand the bank’s policy for which the check has been drawn in the business. The possibility of clearance of the business amount lies with https://www.facebook.com/BooksTimeInc/ the bank itself. That said, it’s important to point out that stale dated checks are not the same as voided checks, which will have the word “VOID” written across the face. Instead, stale-dated checks are the same as unclaimed checks and dormant checks. That means if you find a stale check made out to you, contact your bank and the check-issuing bank and find out their policies. Bankrate.com is an independent, advertising-supported publisher and comparison service.