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Understanding holding periods with electronic check deposits
Understanding holding periods with electronic check deposits

Holding periods are an essential component of Stable’s risk management strategy for electronic check deposits, designed to balance security with accessibility.

Updated over 3 months ago

What are holding periods?

Holding periods are predefined timeframes during which deposited funds are held before they become fully accessible. These periods allow for the verification of the legitimacy of checks, crucial for protecting businesses against financial discrepancies arising from returned or bounced checks. Here’s how it works within our electronic check deposit process:

  1. Deposit initiation: When a check is detected, you can initiate a deposit. Our operations team endorses the check using the account number and then uses mobile deposit hardware we have onsite to deposit your check.

  2. Funds settlement: Funds are credited to your electronic check deposit account within one business day. However, the availability of these funds is contingent upon the holding period associated with the check's amount (explained below).

  3. Transfer to bank account: Once the holding period has elapsed, the funds become available in your Stable holding account to be periodically transferred to your bank at the frequency of your choice.

Holding period tiers explained

Electronic check deposits employ tiered holding periods, tailored to the amount of the deposited check:

  • Checks up to $20,000: No holding period, allowing for immediate fund availability.

  • Checks between $20,000 and $100,000: Subject to a 3-business-day holding period to mitigate increased risk.

  • Checks over $100,000: A 5-business-day holding period is applied to manage significant financial risk.

Managing check reversals after the holding period

In cases where the holding period fails to prevent a check reversal after funds have been transferred, Stable has measures in place to address the situation:

  • Handling reversals: If a check is reversed post-transfer, you are notified to either refund the transferred amount or deposit another check to balance the account within 15 days.

  • Addressing frequent reversals: To minimize financial disruptions from frequent reversals, Stable may extend the holding period for customers experiencing recurring issues.

For more detailed information on electronic check deposits, visit our support page: How do check deposits work?

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