Dollar Scholar Asks: Does Postdating a Check Work?
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This is an excerpt from Dollar Scholar, the Money newsletter where news editor Julia Glum teaches you the modern money lessons you NEED to know. Don't miss the next issue! Sign up at money.com/subscribe and join our community of 160,000+ Scholars.
My landlord is a retired bus driver who goes by “Mr. B” and picks up my rent check from a box in the building’s lobby on the first of the month. I can guarantee he has never heard of One Direction, which is why I didn’t even attempt to explain to him earlier this year that my roommate and I were spontaneously flying to California to see Harry Styles in concert and therefore needed to pay our rent early.
So I took a gamble. Before we left on the 27th, I wrote the following month's rent check. I dated it for a few days later, put it in the box and sent up a prayer that Mr. B wouldn’t cash it until the 1st, when there would be enough money in my account to cover it.
This practice is called “postdating,” and I had no idea whether it would be effective. I Googled a bunch of questions — do depositors have to abide by the date on a check? Does the bank care? Is it against the law? — but had trouble finding definitive answers.
In between shows, I decided to find out.
Does postdating a check work?
Writing a future date on a check with the hope that the recipient won’t deposit it until later is common, but it’s nowhere near surefire, says Kari Mitchum, vice president of payments policy at the Independent Community Bankers of America.
“As soon as you sign a check, it is legal,” she adds. “You are allowed to postdate a check, but that does not prevent the payee from depositing it — or the bank from accepting it.”
My signature, not the date, is what makes a check become legal tender. It’s good to go the second the recipient gets it, so postdating a check is not a foolproof way to delay its deposit.
Jim Locke, the chief operating officer at The People's Bank in Mississippi, says banks vary in the way they handle postdated checks. While some may honor the date and reject the deposit, others may not have a problem accepting it right away.
“Each bank, in their terms and conditions, will more than likely address how they handle postdated checks and stale-dated checks, which are checks that are older than six months,” Locke says.
Often, these disclosures are vague on purpose, giving the bank leeway in how it handles each check. For instance, Wells Fargo’s terms say it “may, without inquiry or liability, pay a check even if” it's postdated or stale-dated. Same situation if it “has special written instructions indicating we should refuse payment (e.g., ‘void after 30 days’ or ‘void over $100’)” or there's no date on the check at all.
Chase’s terms actually prohibit customers from writing postdated checks that try “to limit the time or method of payment with a condition,” adding that it has “no duty to discover, observe or comply with these conditions and may pay such checks.” Feisty.
Locke says it all comes down to the preference of each bank — and, in some cases, how the payee is making the deposit.
If Mr. B is physically going to the bank to cash my check (as opposed to mobile-depositing it into his account digitally), the institution is more likely to scrutinize the date. Bank reps tend to “inspect that item a little closer because cashing a check is a little higher risk than making a deposit,” Locke adds.
Mitchum says it’s important to know the fine print of my bank’s policies. It’s also crucial to stay on top any checks I have sitting around. If my grandma writes me a check for my birthday and I forget to cash it for several months, I could disrupt her finances when I finally do.
“That is a variable with writing checks: You don't know when the other person’s going to deposit it,” Mitchum says.
When it comes to paying my rent, she suggests asking Mr. B not to deposit my check before the 1st or seeing if he’ll accept an ACH transfer, a payment that’s made through the Automated Clearing House network. With electronic bill pay, I can schedule the date I’d like the funds to be sent to a vendor.
“That’s the only way to 100% know that payment is going to come out on the day you would like,” Locke says.
The bottom line
Nobody — not my landlord, not the bank — has an obligation to abide by the date I scribble in the corner of a check.
“The best way to delay a deposit is to work with the person you're trying to give the money to,” Mitchum says.