If A Deposit Is Pending Can I Use The Money? [How Long Will It Stay That Way]

There are few feelings more exciting than seeing new money coming into your bank account. Whether it was a gift or you earned it through your hard work, you’re probably already brainstorming ways you can spend your new cash. Not so fast, though! You might want to wait before you start spending.

Just because you see the balance in your account doesn’t mean that it is yours yet. A deposit that is pending in your account can’t be used until it’s completely cleared and is sitting in your bank balance.

This article goes into depth about how deposits work, why they pend, and some tips for when you have a deposit pending.

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What Does It Mean If My Deposit Is Pending?

Seeing a deposit that has been pending for some time can feel very frustrating. There’s usually no way of getting around it other than waiting for the money to be transferred completely into your account. This is because the money that is pending hasn’t been verified yet.

Until the funds have been verified, they aren’t going to be available for you to use because the relevant authorities need to make sure the transfer or deposit was legitimate and legal. While you might see the amount, the relevant authority or organization hasn’t cleared it to go into your account yet, and so the balance you see is indicative.

This is because a fraudulent deposit or transfer could make the bank lose money. The bank would essentially be giving you money that it doesn’t have access to. Banks want to avoid this- which is why they have extensive verification processes for deposits and transfers.

The reason you see that a deposit is pending is that the bank is acknowledging that it has received the money or funds and is simply verifying that they are legitimate before giving you access to them.

How Long Does A Deposit Stay Pending?

Depending on the type of deposit you have made and your bank’s policies, a deposit may stay pending for a very short period, like hours, for to up to two business days. Some organizations like Transferwise make transfers clear almost instantly- even if they come from a bank account from another country.

A wait of two business days or so is fairly standard for pending deposits. There are regulations around how long your bank can keep your funds pending. This is to protect you from your money being held. As such, you shouldn’t stress if your funds have been pending for one to two days or so- and you also shouldn’t expect a deposit to clear immediately. It’s best not to spend the deposit until it’s fully cleared into your account.

Some deposits stay pending for three to five business days, and the amount of time your deposit stays pending might also depend on when you actually deposit it. For example, some banks have a cutoff time of 5 pm for deposits. If you deposit the check after this, then your bank can’t start processing the check until the following business day at the earliest. This means your deposit may stay pending for longer than you might normally expect.

Also, a financial institution can hold checks or deposits for longer if they are larger amounts. A check that is worth more than $1,500 might cause your bank to keep it for up to ten business days while it clears the check and investigates it.

As such, you shouldn’t be concerned if you’ve deposited a larger check, and it hasn’t cleared quickly. This is fairly normal with larger amounts. If you’re ever concerned that your check or deposit is taking too long to clear, you should speak with someone at your bank directly.

Bank Clearing Times

If you often have deposits pending and rely on deposits as a large part of your income, you might want to think about this when opening a bank account. Different financial institutions have other policies on clearing times. Your bank should make clear what its policy is regarding deposits and how long they can be pending.

Checks often take longer to clear than other types of deposits, for example. It’s also important to note that your bank is legally required to investigate behavior or conduct that it considers to be suspicious or unusual.

For example, if you deposit a large check or amount into your account, and this is something you’ve never done before, your bank may keep the deposit pending for a longer period as it investigates the deposit more closely.

Why Is My Check On Hold?

If your check is on hold, this may mean a number of things. One of the most common reasons is that your account is new. It’s common practice for banks to hold deposits or checks for new accounts until they clear completely before giving you access to the balance.

If you’ve been with your bank for a while and develop a relationship with your bank, then your bank is more likely to consider you to be dependable and deposit the funds from a check into your account before it has cleared completely. 

Some banks also choose to hold checks if they have been deposited via an ATM. This is also common for checks deposited via a mobile banking app. Not all banks treat checks deposited this way, but it’s still fairly standard practice. You should keep this in mind if you are going to receive a deposit this way since it might take longer to clear than you would usually expect. 

How Can I Know When My Deposit Is Ready?

If you deposit a check into your account with an ATM or a teller, you should receive a receipt that states when the funds should be available in your account. This is the easiest way to know when your funds are going to be available. Otherwise, you generally need to check manually to see when the deposit has been released into your account.

Some banks have apps with a notification feature that informs you of when deposits have cleared into your account. If you have one of these apps, then you should receive a notification on your phone the instant the deposit has cleared into your account, and you can use the funds. 

Can I Withdraw A Pending Deposit?

As mentioned above, you do not have access to a pending deposit until the bank has finished transferring the balance into your account. This means don’t have access to the funds in any way until the bank has approved the deposit.

This is why it’s important that you distinguish between pending deposits and your bank balance and don’t take accidentally take out funds that you don’t have access to yet.

How Can I Know If My Deposit Is Pending?

Most banks now offer apps or online banking services to their customers. If you have access to an app or online banking, log onto your account, and there should be a field for any deposits that might be pending in your account.

Be careful that you don’t mistake the pending deposit or deposits for your actual bank balance! I have been there, and those overdrawn fees are never fun! 

Can My Bank Decline A Pending Deposit?

Unfortunately, your bank can decline a deposit if it thinks the funds are illegitimate in some way or that they aren’t actually available, to begin with. This is especially relevant if the deposit is coming directly from another bank account.

To verify that the funds are in place, your bank has to contact the bank of the other account holder to make sure that the funds are indeed in the different account. If your bank runs into any trouble during this process, it may choose to decline the deposit altogether.

Your bank could also decline a deposit if it verifies that the other account does not hold the funds that it is supposed to transfer to you.

How Can I Budget With A Pending Deposit?

If you have a large deposit pending, then you may want to be extra careful with your budgeting- especially if you often have large deposits pending in your account. There is always a risk of your deposit being declined by the bank, even when it’s legitimate.

If you plan your life so that you live paycheck to paycheck, then you run the risk of spending more money than you have access to, especially if a deposit does get declined for some reason.

One way that you can budget with deposits pending is by coming up with a budget with and without the additional funds that that deposit is going to give you. If you do so, then you should be especially mindful of any deadlines you might have (bills, for example) and how long your deposit might potentially be pending.

Related: How to Keep Track of Bills and Payments Easily So You’re Never Late Again

This is a great way to prevent yourself from spending money that you don’t have by mixing up the balance in your account with the pending balance, which you don’t have access to yet.

Conclusion

While it’s easy to get tripped up and overspend with a pending deposit, by paying attention to when the deposit clears and realizing you don’t yet have access to that money, you can avoid overdraft fees and late payments.

If you’re trying to budget based off pending deposits, it’s best to set up bill payments for a day after the deposit will post. The best way to know how many days it will take your bank to accept a deposit is to contact them and ask. Each bank has different policies but the general rule is 1-3 days.

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Steffa Mantilla

Certified Financial Education Instructor

Steffa is a Certified Financial Education Instructor (CFEI) and the founder behind Money Tamer. Her 12-year background in operant conditioning and positive behavioral change training is used to help people find effective motivators to change their harmful money behaviors. Steffa explains the reasons “why” behind people’s financial behaviors and how to successfully change them. After paying off over $80,000 in debt through budgeting, she now teaches families how to get their own finances in order. You can learn more about her here.

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