A postdated check is a check that, in theory, should not be cashed or deposited when received, but rather deposited or cashed on the date shown on the check which is some date in the future.
The idea behind a postdated check is that the issuer of the check is giving payment for goods or services at the time services are rendered or at the time of receiving a goods. However, they are requesting that the check not be deposited until a later time.
Typically someone writes a postdated check because the funds are not currently available in the account from which the check is drawn, but will be available presumably by or on the date noted on the check.
The issuer is hoping that the person receiving the check will honor the request to not deposit the check upon its receipt, but rather deposit or cash the check at a later time.
Postdated checks are also used for purposes other than cashing or depositing when funds become available. A postdated check can simply serve as another way to keep a record of when you made scheduled payments to someone so that there will be documentation of when a bill was paid.
These types of post dated checks can serve as electronic proof of a business transaction in the event that accounting records become lost or damaged.
What Is A Demand Deposit Account?
A check is a negotiable instrument that can be used to make payments or withdraw cash. Most banks will not honor the future date on a check if the check is presented at a bank to be cashed or deposited.
Another term used for checking accounts is Demand Deposit Account or DDA, meaning that when a check is presented to a bank it is a demand to be deposited into the account of the payee.
It is assumed that when a check is issued to a person or business that the funds are available to cover the amount of the check all the way up until the check is deposited, but before a check expires. (See below)
Checks are designed to be cashed or deposited on the date they are received, and not according to a “postdated” day sometime in the future. The date on the check is used as a reference of when the check was issued as well as a way to tell how old a check is since personal and business checks will expire typically 180 days or six months from the date on the check.
Is My Bank Allowed to Cash a Check with a Date in the Future?
Yes, a bank will cash a check with a postdated date as long as the account is open and the account holder is in good standing with their bank with funds available to cover the check’s amount.
When you write a check, you are essentially giving the payee’s bank permission to take the money out of your account when the check is presented for deposit as discussed above. The funds won’t actually be transferred until the check clears, which can take a few days.
So, if you’re expecting a payment and want to use that money to pay bills or make purchases, you can go ahead and write another check or use a debit card. However, just be sure to keep enough funds in your account to cover the deposited check in the event the check gets returned.
How Do I Give My Bank Reasonable Notice Of A Postdated Check?
There are a few ways to give your bank reasonable notice that you have written a postdated check.
There is no guarantee that a bank will honor a request to release or hold funds for a postdated check, but it depends on the bank.
Keep in mind that banks may require up to two weeks of prior notice before you issue a postdated check. This is so they have time to prevent a check from being paid if it’s already been issued. This varies by bank, so be sure to ask your specific financial institution about their policy.
You can mail a letter, send an email, or call customer service.
If you choose to mail a letter, be sure to include the following information:
- Your name and account number
- The type of account (checking, savings, etc.)
- The date you want the check to clear
- Your signature
If you choose to email or call customer service, provide the same information as you would in a letter.
If you’re trying to stop a check from being paid, providing notice within 2 business days should be sufficient in most cases. Keep in mind that some checks may still go through even if you provide notice, as the funds may have already been transferred by the time your notice is received, so it’s always best to try and stop a payment as early as possible.
Can I Legally Accept Postdated Checks?
It depends on what state your bank is in. The Uniform Commercial Code (UCC) governs the use of post-dated checks in interstate commerce. Some states have adopted the UCC, and some have not. In states that have not adopted the UCC, post-dated checks may be unenforceable.
In other words, in most cases you can accept a postdated check, and you can deposit the check before the date on the check unless there is an agreement or contract to deposit the check on a future date. For more information, consult an attorney in your state.
Even though you can legally accept a postdated check, there are a few things to keep in mind if you do choose to accept a postdated check with the intention of depositing it later on.
First, be aware that the person writing the check may be able to stop payment on it if they change their mind or encounter financial difficulties. It’s important to only accept postdated checks from people you trust or have a longstanding financial history with you regarding postdating checks.
Second, make sure you have a clear agreement with the person writing the check about when and how the funds will be deposited into your account. This will help avoid any misunderstandings or conflicts later on.
Third, remember that postdated checks are essentially just like any other type of check – they represent an agreement to pay you for goods or services
Lastly, in some cases, people will write a post dated check knowing that they won’t have enough money in their account to cover it by the date on the check. This is illegal and is a type of check fraud.
Do I Need A Lawyer?
It depends on the situation, but if you wrote a postdated check and you had a contractual agreement with the payee to honor the future date and the check was cashed before the agreed upon date, then you may have a claim for breach of contract.
On the other hand, if you wrote a postdated check, especially for a large amount, and the check was deposited but later returned for nonsufficient funds, then you may be liable for your bank fees, the payee’s bank fees, and the original amount of the check.
In this case, you would likely need a criminal defense lawyer to defend you against potential civil or criminal charges.
You might need a financial lawyer to help you recover lost money if you accepted a post dated check and upon presenting it to your bank, the bank would not honor it because the check was too old or the account was closed or had insufficient funds.