Stale-Dated Checks Bank Checks 101

That way, you’re not only aware of your financial standing, but also shielding yourself from issuing a check when there aren’t sufficient funds to cover it. Tracking of payments can be accomplished through the use of checks, which provide both a paper trail and evidence of payment. Through the use of the check, the sender and the recipient of the payment are able to retain a record of the transaction, which includes the date, the amount, and the payee.

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• They represent pending transactions where the funds have not yet been deducted from the issuer’s account.
• Some courts have found those time-limiting statements to be unenforceable, but don’t count on that in every case.
• Generally, a “stale check” (also called a “stale-dated check”) is an uncashed check that’s more than six months old.
• Make sure to also double-check that they haven’t switched financial institutions or opened a new account.
• Even if banks are only legally required to honor checks for a six-month period, it is usually a good idea to avoid any potential problems by depositing checks when you receive them.
• However, you still owe the money, and banks can choose to process the payment.

After a certain point, they go “stale” and are considered outdated, which is distinct from having a true expiration date. Once you discover an uncashed check, also known as an outdated or stale check, should you cash it? That can be a tricky question because of the confusion surrounding the shelf life of a check. US Treasury checks are government-issued checks valid for one year from the date issued. Even if they expire, you can still get a replacement by contacting the agency that authorized the check.

• Uncashed checks are those that the payer has written but the payee has not yet cashed or deposited.
• As such, there is no incentive to wish for an outstanding check to permanently never be cashed as the payment is subsequently owed to the government for holding.
• Expiration dates and other issues regarding check use are governed by the UCC—that’s a set of laws that regulate commercial transactions in the U.S.
• This could help you avoid any surprise fees because of negative balances.
• Last, outstanding checks might have an impact on management of the cash flow.
• Let the person or entity know you plan to deposit the check, so they can make sure their account has the funds.

What Happens if You Deposit an Expired Check?

• You can also call or write to remind the payee that the check is outstanding.
• After that, they’re considered “stale.” Legally, banks and credit unions are not obligated to accept stale checks.
• If you’ve found a “forgotten” cashier’s check, look for this disclaimer.
• Remember that escheatment laws require companies to turn over unclaimed funds.
• Different types of checks are valid for different amounts of time.
• The only exception to stale-dating may be a certified check, which must be honored, even after 180 days.
• Instead of depositing those old money orders, you may need to contact the issuer to get any remaining value.

Other types of checks, like certified checks or government-issued tax-refund checks, may have a longer expiration or none at all. Do personal checks expire more quickly than company-printed checks? 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. It’s also a good idea to monitor your account and keep an eye out for outstanding checks that you’ve written.

Next steps: Ways to avoid a check going stale

But now and then, you may need to write a check https://www.bookstime.com/articles/accounting-transaction-analysis to a vendor or receive one as a form of payment. The offers that appear on this site are from companies that compensate us. But this compensation does not influence the information we publish, or the reviews that you see on this site.

Last, outstanding checks might have an impact on management of the cash flow. In this article, we’re sharing whether you can cash a stale dated check and answering common questions we receive on the topic. Some courts have found those time-limiting statements to be unenforceable, but don’t count on that in every case. Still, it’s best to honor any language on a check—either deposit the check promptly or contact the https://www.facebook.com/BooksTimeInc/ check writer if you can’t make the deadline.

While a bank does have the right to refuse an old check — and even return it to the original issuer — it also might decide to honor it. Before trying to cash a stale-dated check, it stale dated checks might be a good idea to contact the bank that holds the account the check is drawn against to see what its policy is. 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 year, though that can vary by state. Outstanding checks also have the risk of being used in fraudulent conduct. Someone else could be able to change the payee name or the amount if a check is misplaced or stolen before it is taken to the bank.

Closed Accounts

There are actually some benefits to have checks outstanding as well, though. Writing checks makes it possible for organizations and individuals to make payments without requiring instantaneous cash or electronic transactions to be completed. Checks that linger only buy the company more time to gather up enough resources for payment to clear if more time is needed.