How Does a Bank Clear a Check?

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A bank clears a check by making sure the date is filled out correctly, determining whether the check has been filled out with the appropriate numerology, and matching the signatures with the current signature card on file at the bank. Learn how a bank may hold a check before releasing the funds to make sure that everything is working properly with information from a registered financial consultant in this free video on personal finance and money management.

Part of the Video Series: Personal Finance Tips
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Video Transcript

This is finanical advisor, Patrick Munro, talking about how does a bank clear a check. A bank will receive a check into its clearinghouse and needs to scan it for compliance purposes. And the check must be the appropriate date as to the current billing cycle. Make sure it's the right year, etc. Both fields in the check have to be filled out where the numerology is the same as the written format of the check. If it's not it would be returned to the sender and not honored. And of course, the signatures must match the current signature card at the financial institution. This is for the purpose of fraud protection, and banks very much monitor that situation, but you must monitor it as well when you clear your checks on a, and balancing them on a monthly basis. This is what a bank does when they clear their check procedures. If there is anything untoward about the check sometimes banks will hold the release of the funds for ten days to make sure that everything went correctly, and that there is no problems with that. This is financial advisor, Patrick Munro, talking about how does a bank clear a check.


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