Many of us write checks for groceries, PTO responsibilities, Boy Scouts or Brownies, etc. Those checks usually came with a “float” time, the time between when the check was written until it gets processed at the bank and the amount is taken out of your account. With today’s technology, is that buffer time still available?

Unfortunately, no.   One of the biggest factors that influenced the amount of time between writing the check and the bank removing the funds was the Check Clearing Act of the 21^st Century (commonly referred to as the Check 21 Act) passed in 2004. This allowed check payments to be processed electronically rather than requiring the banks to send the physical check between themselves or the Federal Reserve; drastically reducing the overall time it takes for a bank to remove the funds.

The Check 21 Act, coupled with other steps in technology, has all but removed this buffer time. If you were accustomed to using the “float” time while you scrounged together the funds, you need to be aware of the changes that have taken place. Most checks now take as little as 24 hours to be credited against your account, and in some cases where electronic processing is done on the check by retailers and other businesses, that transaction could hit your account immediately. A good option, if you were on friendly terms with the receiving party, would be to let them know when the funds are available and they could safely cash the check at that point in time.

There are many options for protecting the funds in your account, and many that can deal with this issue. There is overdraft protection that can be taken to ensure that you are covered if you rely on a buffer time. If you are worried about check fraud, many companies like BradfordExchangeChecks.com offer protection for up to 2 years to give you piece of mind. However you do it, make sure you take precautions to ensure that your personal checking account is always secure!