While many people believe that a check-either business, payroll, or personal-is valid for six months following the original issue date, there is no official standard timeframe. Check cashing deadlines depend on statues and policies that differ from state to state and organization to organization.
Most banks and savings and loans generally adhere to a 180-day expiration timeframe for cashing personal checks; some allow up to one year for business payroll checks. However, the issuing organization or bank may have a lesser timeframe policy.
Many business checks do have a time limit annotated on the check. Sometimes the time limit will appear as a watermark designed into the paper, others will have a printed message on the check face. If the check has a printed expiration date it is often located near the issue date or the signature line.
Banks can allow acceptance of a check older than 180 days, as long as they accept it in good faith that it is still valid. However, if the check is no longer a valid payment, the bank has the legal right to withdraw funds from the receiver’s in-house account to cover the loss. For that reason, not many banks will cash an older check if the payee does not:
- Have an account with them
- Have sufficient funds to cover the check amount
- Consent to the funds being held for several days until the check clears the issuing organization
Each state has guidelines that govern check validity time frames, and those guidelines pertain not only to financial institutions but also to alternative financial service providers. Pawnshops, some retail stores, and check cash outlets are among commercial enterprises that will cash business checks. Not many allow third party or personal checks, but they all charge a fee for their service. The amount could be a set amount or a percentage of the check.
As long as the check cashing organization’s acceptance timeframe does not contradict or extend beyond state guidelines, they may implement their own policies on the timeframe for which they are willing to accept a check after the date of issuance. They may accept a payroll check for as little as ninety days after the issue date or as late as one year past issuance.
“Uniform Commercial Code Act.” Cornell University Law School. Cornell University, n.d. Web. 25 June 2010. www.law.cornell.edu/ucc/4/article4.htm#s4-111.
” FDIC Law, Regulations, Related Acts – Consumer Protection .” FDIC: Federal Deposit Insurance Corporation. N.p., n.d. Web. 25 June 2010. http://www.fdic.gov/regulations/laws/rules/6500-3235.html.
“Alternative Financial Services: A Primer.” FDIC. United States Department of Treasury, n.d. Web. 25 June 2010. www.fdic.gov/bank/analytical/quarterly/2009_vol3_1/FDIC140_QuarterlyVol3No1_AFS_FINAL.pdf.