A cheque hold occurs when a financial institution temporarily restricts the availability of funds from a deposited cheque, often as a precautionary measure to reduce the risk of insufficient funds or potential fraud.
To remove a hold on a cheque, try getting in contact with your bank and kindly ask for the hold to be shortened or removed altogether. Legally, however, financial institutions in Canada have the right to hold a cheque for up to 8 business days, not including the first $100.
In this article, we’ll explore what cheque holds are, why they occur, and how to get around them. Let’s get started.
Key Takeaways
- Imposed by financial institutions, a cheque hold is a temporary delay on accessing your deposited funds.
- Canadian banks have the right to hold cheque funds for 4 - 8 business days, depending on the deposit method and amount. This may be longer in certain circumstances.
- To reduce or avoid cheque holds, consider requesting certified cheques, opting for electronic deposits, or choosing in-person deposits over ATM or mobile app deposits.
How to remove a hold on a cheque
If your cheque is held, there isn’t much you can do other than request that the bank remove or shorten it. To help your case, you may point out your good standing with the bank and ensure that you have more money in the account than what you’re depositing with the cheque. This will show the bank that you can cover the funds in the chance that the cheque bounces.
On the other hand, there are certain things you can do to shorten or avoid cheque holds altogether. Here are some examples:
- Request for a certified cheque, bank draft, or money order from the payer, as opposed to a personal cheque. Since the funds here are guaranteed, it’s less likely to be held, especially if you see a bank teller at a branch.
- Opt for electronic deposits as an alternative to cheques.
- Deposit in person (at a branch) as opposed to an ATM or mobile app. In-person deposits tend to have shorter hold periods.
What are cheque hold periods?
A cheque hold period is the amount of time the funds are held before being released. The maximum cheque hold period for federally regulated financial institutions in Canada ranges from 4 to 8 days, depending on the deposit method (in-person or ATM/mobile app) and deposit amount. Here are the details:
- The first $100 must be made available to you right away.
- Amounts below $1,500 may be held for up to 4 business days if deposited in person or 5 days if deposited using any other method.
- Amounts above $1,500 may be held for up to 7 business days if deposited in person or 8 days if deposited using any other method.
Please note that there may be exceptions to the above hold limits in certain circumstances, such as if you’re depositing a foreign cheque, have opened your bank account within the last 90 days, or the cheque is stale-dated (written more than 6 months ago).
Cheque hold policy by bank
The hold limits above are guardrails put in place by the Government of Canada and are pretty standard across the board. Various financial institutions, however, have different speeds at which they remove holds on funds.
In the table below, we look at the cheque hold policies of some of Canada’s biggest financial institutions:
| Bank | Cheque hold policy |
|---|---|
| RBC | * 4 - 5 business days for Canadian cheques * Up to 15 days for cheques written from US accounts |
| Scotiabank | * 4 business days for Canadian cheques * 9 days for USD cheques written from a Canadian bank * 19 days for cheques written from US accounts |
| BMO | * 4 - 8 business days for Canadian cheques * Up to 15 days for cheques written from US accounts |
| TD | * 4 - 6 business days for Canadian cheques * Up to 15 days for cheques written from US accounts |
| CIBC | * 4 business days for Canadian cheques |
| EQ Bank | * 5 - 8 business days for Canadian cheques |
| Alterna Bank | * 3 - 8 business days for Canadian cheques * Up to 30 days for foreign cheques, including US |
| Tangerine | * 5 business days for Canadian cheques * Up to 30 days for foreign cheques, including US |
Your bank’s cheque hold policy
Cheque holds are put in place to lower the risk of insufficient funds or fraudulent activity, but they’re still inconvenient to experience.
Have you ever had a hold put on a cheque? How long did it last? Did you use an alternative method for accessing funds? Let us know in the comments below!
FAQ
Can the bank hold a government cheque in Canada?
Generally, most banks don’t put holds on government cheques. In certain instances, however, they’re entitled to, such as if they believe that the cheque is counterfeit, or if the cheque amount is over $1,750.
How long does RBC hold cheques?
RBC generally processes Canadian cheques within 4 - 5 business days, while cheques from US accounts may take up to 15 business days to clear.
How long does TD hold cheques?
TD generally processes Canadian cheques within 4 - 6 business days, while cheques from US accounts may take up to 15 business days.
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