Unfortunately, Ash, check holds are becoming more the norm in the banking industry thanks to technology making it so easy to forge checks, money orders and even cashier checks, along with people who continue to fall for the various check scams. When you deposit a paper check, the actual cash is not yours until it is received from the bank that the check is written on. While the cash can be received within a few days, a bad check may take up to two weeks to be returned. Depending on the degree of risk, banks may front the funds before it is actually received.
The majority of bank account today cost the account holder nothing and normally does not require minimum balance, which increases the risk to the bank of losing money especially for those who maintain little money in those accounts. For this reason, federal law allows them to hold the funds for a specific time - normally anywhere up to 11 business days, depending on the type of check and depositing situation. When you open an account with any Financial Institution, they are required to provide you their hold policies in writing. This is usually contained in the Depository Agreement and Disclosure (DAD). You can find USAA DAD here. Banks normally use a computer logarithm to determine the risk associated with a specific check deposit and based on that assessment whether and how long the hold is required. Below are some (but probably not all) of the things a bank may look at to determine when a hold is applied, how much and for how long:
There are several things you can do to reduce the chance of a hold or at least alleviate the effects of holds on paper checks. The best is increase your account balance(s), not only does this minimize the risk of holds on checks, but it will also provide you a buffer to help prevent NSF charges and provide an emergency fund when it is really needed. If you are not able or willing to maintain a higher account balance, and will need to deposit paper checks, then I recommend using a local credit union or bank that you can make the deposit in person. This may not stop a hold, but it will minimize the chance and length of the hold. In cases where you need the funds right away, if the bank that the check is written on is local, you can always take it to them to cash (if you don't have an account with them, they may charge a fee).
Unfortunately, for those who don't have direct deposit or those who live payday to payday with little or no savings, an Internet bank with no local brick and mortar location is probably not an ideal bank. No matter which bank or credit union you use, be sure to read and understand the Depository Agreement and Disclosures so you will not be surprised when a hold happens.
Out of all of the USAA employees contributing to this community, you are top notch! You always provide so much helpful information. If USAA hasn't given you a raise lately, they are doing you a disservice.
Thank you DSTEXAS for posting our depository agreement.
Ash2311 - I truly do understand your frustration and I see that you have already reached out to one of our member services representatives. If you do need further assistance, I do encourage you to send us a private message here, or give us a call at 1-800-531-8722. Thank you again for taking the time to comment.