Note: This article is part of our Basic Banking series, designed to provide new savers with the key skills to save smarter.
If you need to write a check but you don’t have enough money in your account to cover it, you might consider postdating the check.
When you postdate a check, you put a future date on it rather than the current one. This attempts to delay a recipient from cashing the check until payment is due or there are sufficient funds in your checking account, among other reasons.
But banks and credit unions will sometimes cash postdated checks before the date listed, so you need to be careful. Is it worth writing a postdated check? We’ll tell you what you need to know about these types of checks, as well as explain some of the cautions surrounding them.
What is a postdated check?
For a personal check to be valid, there are five sections you need to fill in:
- The date
- The payee (the name of the person or organization being paid)
- The amount in numerical form
- The amount in written form
- The signature
Of those sections, the date serves an additional function. A person will normally write the current date on a check, which starts a timer for it to be cashed. But someone who postdates a check includes a future date — for example, writing May 17 when it is actually May 10.
The Uniform Commercial Code (UCC), which has been adopted by all 50 states with some variations, considers a check to be stale six months after the date listed on it. A bank can refuse to cash a stale-dated check.
What to know about cashing postdated checks early
With a check that is postdated, the idea is that the individual or business will wait until the date written on the check to cash it. Likewise, it’s hoped that banks or credit unions would wait to process it, providing a window for the person who wrote the check. But you need to contact your financial institution before you plan to write this type of check.
The UCC allows for a bank to accept a check that is postdated before the date listed. A law in your state, though, could prevent the bank from cashing the check if you provided reasonable notice (more on this later). How long that notice is valid depends on how you contact the institution.
Without putting the request in writing, the notice could be valid for only 14 days. A written notice could extend that time to six months. A bank could be liable for any damages if it chooses to ignore your notice. You can submit a complaint with the Consumer Financial Protection Bureau if you believe your bank broke any laws.
In most cases, a customer can request a stop-payment order from their bank or credit union. This will prevent a check from clearing a bank before the date listed. The timing of the notice is vital since the length to process a check can vary. Institutions are likely to charge a fee for stop-payment orders. For example, Bank of America and TD Bank charge $30 per request, while Navy Federal Credit Union charges $20 per item or $25 for a series of items.
Regulations on postdated checks
We’ve mentioned that certain states have laws in effect on checks that are postdated. Here’s a sampling:
- Florida: Anyone filling out a check that is postdated is required to notify the institution in writing. You must include the date, the payee’s name, the number and the amount. The institution will not be held liable for providing the funds if written notice was not provided.
- Idaho: Revenue officers trying to collect taxes are not allowed to threaten to deposit checks before the date listed. They also can’t solicit postdates checks as an attempt to threaten criminal prosecution.
- Maine: Check-cashing or foreign currency exchange businesses can’t cash or advance money on a check that is postdated.
Banks and credit unions are likely to give specifics about checks that are postdated via disclosures or account terms. Here are some examples:
- Alliant Credit Union: You agree to not deposit any check before it is payable.
- Chase Bank: The bank specifies that customers should not issue anything postdated.
- Wells Fargo: It makes it clear it will not wait until a certain date to cash a check that is postdated unless a stop-payment order is requested. You are also responsible for canceling the stop-payment order when the check can be paid.
Alternatives to postdated checks
If you’re looking for options when you need some more time, consider the following:
- Use an online bill pay service to schedule future payments. This way, you can use your checking account without having to write a check that is postdated.
- Ask for a payment plan. Depending on who you owe, you may be able to set up an alternate schedule or change a payment date.
You could also consider banks or credit unions that allow free automatic transfers from linked accounts or ones that have low overdraft fees.
The bottom line
With how speedy the banking process is today, postdating a check is probably not worth the trouble. Not only is it not always effective on its own, but the procedure a person would go through to make sure a check is not cashed until the written date can be a waste of time and result in additional fees. When writing a check, do your due diligence to make sure there are enough funds to cover it.