In most cases, when you receive a postdated check, you can deposit or cash a postdated check at any time. Debt collectors may be prohibited from processing a check before the date on the check, but most individuals are free to take postdated checks to the bank immediately. That said, if you agreed to wait, cashing the check prematurely might be considered in violation of an oral agreement, and that could be illegal in some jurisdictions.
On June 4, when the supplier receives Jim’s postdated checks, the supplier should not debit cash nor credit accounts receivable. The reason is that the checks cannot be turned into cash prior to the dates shown on the checks. A payday borrower typically writes the lender a postdated personal check for the amount of the loan plus a fee. The lender cashes the borrower’s check on the agreed-upon date, usually on the borrower’s next payday. But in some cases, the payer may provide the payee with a postdated payment.
A post dated check is a check on which the issuer has stated a date later than the current date. It is used when the issuer wants to delay payment to the recipient, while the recipient may accept it https://www.quick-bookkeeping.net/credere-definition-meaning/ simply because the check represents a firm date on which it will be able to deposit the check. This approach is used to improve the odds of being paid, especially when the issuer has little credit.
How to Write a Postdated Check
A postdated check is one that is written with a future date indicated on it. This is usually done to account for an anticipated delay in deposit. For example, you may decide you would like to postdate a check if you are sending in a bill payment earlier than the due date. It is also common to postdate a check if there are insufficient funds in the checking account at the time the check is written.
This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. From the perspective of the payer, the best way to ensure that funds are not released early is to notify the bank not to release funds against this check any earlier than the date stated on the check. See NerdWallet’s picks for the best high-yield online savings accounts. Hintz says that only criminal intent, such as intentionally not having enough money for a payment, can be grounds for check fraud.
For instance, a teller may not notice the date on the check and process it that day. Or an individual may deposit a check through the automated teller machine (ATM). If the check goes through and bounces, the payer may be responsible for an NSF charge. Realistically, the recipient of a post dated check may never notice that the check has been post dated, and so will record and deposit it at once. The bank is also unlikely to notice the date on the check, and in any case may have a policy of honoring all checks at once, irrespective of the check date.
Is it Legal to Postdate a Check?
People can postdate several types of payment methods, including checks and electronic payments. Payments may be postdated in a number of circumstances, including if someone sets up a payment arrangement with a creditor or when there are regular monthly payments set to come out of an account. Postdated payments cannot be withdrawn from an account until the date specified. Auditors do not like to see post dated checks, since it implies that the payer is short on cash, and is attempting to pay bills later than it should.
Where a demand for payment of a cheque is made before the date of the cheque arrives, the cheque shall not, by reason of the demand, be taken to have been duly presented for payment. Every day, our world becomes more technologically advanced, changing many aspects of our lives—including the way we bank. Read on to learn more about online banking and how it can benefit you. If you want a basic checking account with no monthly maintenance fee, or an interest-earning checking account, we’ve got the options that are right for you.
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- For instance, a teller may not notice the date on the check and process it that day.
- For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online.
The Uniform Commercial Code, a collection of business laws adopted or adapted by many states, gives financial institutions the right to process a correctly written check with a future date. But you can ask your bank to delay cashing a specific check, and, depending on your state and the bank, it might comply. The date section should include a future date that you would prefer the check be deposited or cashed on. The date on the check serves as a “timer” that indicates when the check can be deposited or cashed.
Post-dated check
You’ll need to check the specific laws for your respective state, but postdated checks are generally legal to write in the United States. Postdating a check may be considered illegal if the check writer’s account does not have how many years can you file back taxes the necessary funds to deposit the check, and if the writer’s intent was to defraud at the time of issuing the check. The Uniform Commercial Code (UCC) enables lenders to loan money, secured by a borrower’s personal property.
Practical Use of a Post Dated Check
If you are concerned about overdrafting — and you’d rather not deal with a returned check and your landlord’s ire — consider switching to a bank with a solid overdraft policies. All of these charge lower than average overdraft fees and offer free ways to avoid that fee while still paying your bills. However, postdating a check can lead to inconveniences and ill feelings for the payee, such as when a tenant sends a rent check and may or may not have the funds ready to be withdrawn. Our partners cannot pay us to guarantee favorable reviews of their products or services. For example, assume that today is January 1, and you’re writing a check. In general, you’d put the current date of January 1 on the check, but you could just as easily postdate it a week and write January 8 on the check, instead.
The only way to guarantee they’ll actually work is to pay extra fees to your bank. If you’re unwilling or unable to pay your bank to monitor your account, you’re at the mercy of whoever you give the check to. Even if your payee is honest, they may make the honest mistake of forgetting (potentially leaving you with bad check fees). If you write a check and don’t have enough money in your account when it’s cashed — whether or not it’s postdated — your bank can cover the payment or let the check bounce based on its overdraft policy. If it doesn’t go through, the recipient might charge you late fees and a bounced-check fee.