Your savings account is not legally protected from holds placed on funds by the bank. As the custodian of the account, the bank has a legal right to hold funds, or freeze the account entirely, under certain circumstances. If you find your savings inaccessible, consult the bank directly; always read the fine print when you open a new account so you're familiar with the bank's hold policy.
Regulations on Bank Policy
On opening any bank account, you will receive a copy of the bank's rules, guidelines and policies, including the all-important "funds availability policy." Checking accounts are governed by a federal rule known as Regulation CC, which requires funds from certain sources -- cash, money orders, government checks -- to be available on the next business day. This rule does not apply to time deposits or savings accounts.
Banks will often impose an extended hold period on new accounts, which are generally defined as accounts less than 30 days old. This means the bank may wait several days for a personal check you deposited to clear before it will make the funds available. The bank may also have a policy allowing a minimal amount of money to be available immediately. The amount can vary with the age of the account; the bank may extend this period if you have a clean prior history as an account holder and have not deposited any non sufficient funds, NSF, checks. First Hawaiian Bank, for example, allows their customers access to $200 of any deposit on the next business day.
ATM Hold Policies
Many banks have a policy for automated teller machine, or ATM, deposits as well. When you deposit a check through an ATM, there's a longer delay between the time you surrender the check and the time the bank actually receives it for processing. For this reason, the hold can be longer. At TCF Bank, for example, a "fifth day availability" policy applies to all ATM check deposits.
Levies and Exempt Funds
If you've been involved in a civil lawsuit and a judgment is outstanding against you, the creditor or plaintiff has the right to request a levy of your funds. The process may involve notification to you either before or after the bank freezes your account -- it depends on state law. If the bank has frozen the account, you've lost access to the funds until the levy is satisfied. Note that some payments, such as Social Securty benefits and in some states child support, are protected from levy. If you do earn exempt money, consider keeping it in a separate account. You can then appeal the hold by proving that all the money in the account is legally protected from levy.
- Office of the Comptroller of the Currency: Depository Services (Savings and Checking Accounts)
- First Hawaiian Bank: What Does It Mean If I Receive a Hold on My Account After I Have Made a Deposit?
- Tech Credit Union. "Funds Availability Policy Disclosure." Accessed Feb. 8, 2020.
- SunTrust Bank. "Funds Availability Policy Disclosure for Deposit Accounts," Page 4. Accessed Feb. 8, 2020.
- Consumer Financial Protection Bureau. "How Quickly Can I Get Money After I Deposit a Check Into My Checking Account? What Is a Deposit Hold?" Accessed Feb. 8, 2020.
- BBVA. "Holds on Checks." Accessed Feb. 8, 2020.
- Federal Deposit Insurance Corporation. "Checking Account Fees," Page 1. Accessed Feb. 8, 2020.
- Federal Reserve Consumer Help. "Can a Bank Wait to Give Me Access to the Money That I Deposit?" Accessed Feb. 8, 2020.
- Federal Deposit Insurance Corporation. "Consumer Compliance Examination Manual: Expedited Funds Availability Act," Page 6. Accessed Feb. 8, 2020.
- Federal Reserve Board. "A Guide to Regulation CC Compliance." Accessed Feb. 8, 2020.
Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.