When a customer deposits a check into a checking account for collection,the depository bank does not have to pay the customer the amount of the check until the check "clears," which is when final settlement occurs.

Question

Quizplus · Accepted Answer

This is correct, the depository bank typically puts a hold on the funds until the check fully clears, which can take several business days or more depending on the amount and issuer of the check. During this time, the customer's account balance may reflect the deposited amount, but the funds are not actually available for withdrawal until after the check clears.

When a Customer Deposits a Check into a Checking Account