If a Deposit is Pending, Can I Use the Money?

It can be extremely aggravating to see a deposit that has been pending for a long time.

There’s usually no way around it except to wait until the money is completely transferred into your account.

This is due to the fact that the pending funds are yet to be verified.

You cannot use the money while a deposit is pending because your bank is probably verifying it. The deposit will be added to your available funds which can be used once it has been verified.

This can be inconvenient if you really need the money right away, but it is finally in your greatest advantage.

It is because you run the risk of overdrawing your account if the deposit is not approved but you have already spent the money.

You would be on the hook for the amount you spent if you used funds in advance that were not ultimately able to be added to your account.

The bank is simply verifying that the money or funds are legitimate before giving you access to them, which is why you see a deposit is pending.

This article explains how deposits work, why they are pending, and how to deal with them.

We will also address a few other personal banking concerns.

 

What does it mean if a deposit is pending?

Money which has been deposited into a bank account but has not yet been authorized for use is referred to as a pending deposit.

Once you deposit money into your bank savings account, it will appear as ‘pending’ until it is verified and added to your available balance.

This is due to the risk of the bank losing money if a fraudulent deposit or transfer occurs.

The bank would be giving you money it does not have.

Banks want to avoid this, which is why deposits and transfers are subjected to stringent verification procedures.

 

How does somebody know they have a pending deposit?

When you log into your bank account, you should see a line item listing any pending deposits. Just make sure you don’t confuse your available balance with your pending deposits.

 

What amount of time does a pending deposit take to clear?

For pending deposits, expect to wait two to three business days. There are limits to how long your bank can hold your funds according to the law.

This is to safeguard you from having your money held against your will.

As a result, don’t be concerned if your funds have been pending for one to two days—and do not expect a deposit to clear right away.

It is best not to spend the money until it is completely cleared in your bank account.

A deposit may remain pending for a short period of time, such as hours, or up to two business days, depending on the type of deposit you made and your bank’s policies.

Even if the funds come from a bank account from another country, some organizations, such as TransferWise, make transfers almost instantly clear.

Several deposits are held in pending status for three to five business days, depending on when you make the deposit.

Deposits, for instance, may be made until 5 p.m. at some banks.

If you deposit the cheque after this, your bank will not be able to begin processing it until the next business day.

As a result, your deposit may be held in pending status for longer than usual.

There are a few exceptions to this rule. A bank, for example, can put a hold on funds if it suspects fraud.

A bank may place a hold on a deposit if you deposit an unusually large sum or make a series of deposits that are unusual for you.

Holds on deposits, on the other hand, will only add a few days to the processing time.

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Under the worst case scenario, a pending deposit should become available within 9 business days of the original deposit, but this is an extremely unlikely scenario.

If you have any concerns about the time it takes for your check or deposit to clear, you could perhaps contact your bank directly.

 

Direct Deposits go through at what time?

Direct deposits are processed at different times by different banks; some will process them at midnight others on the day the deposit is authorized, while others will process them at the start of business the next day immediately after verification.

Through technology many banks now offer a service that allows you to receive an SMS or an app notification when a deposit is processed, allowing you to know exactly when your direct deposit will be processed.

 

Can you withdraw a pending direct deposit?

Because the deposit is still being verified by your bank, you will not be able to withdraw a pending direct deposit. You will be able to use these funds, including withdrawing them, once the deposit has been approved by the bank. It is important to wait so that you avoid incurring some overdraft fees.

 

Is it possible to refuse a pending deposit?

Yes, you can refuse a pending deposit. For example, if there are insufficient funds, inaccurate account information, or your bank has been unable to confirm the deposit for any reason, the deposit may be declined.

For most scenarios, awaiting deposits will be accepted without issue, but they may be declined in some cases.

When a pending deposit is declined, the funds go from pending to not being available.

They are instantly also deducted from your total balance as a result of this.

Your bank must contact the bank of the other account holder to confirm that the funds are indeed in the different account in order to verify that the funds are in place.

If your bank encounters any difficulties during such a process, it may decide to reject the deposit entirely.

Your financial institution may also refuse a deposit if it determines that the other account does not contain the funds that should be transferred to you.

 

Why my deposit is not appearing?

If your deposit does not appear, you should contact your bank to ensure that there is no error.

This is because a pending deposit will normally show up in your account even if funds are not yet available, it is wise to double-check with your bank if you do not see it.

Please remember that your account agreement will specify how long you have to notify the bank if there are any errors.

This is usually 30 days from the date of the statement in which the inaccuracy emerges, so you have plenty of time to correct it.

A deposit may be made into the wrong person’s account on rare occasions.

This is pretty uncommon, but it’s something you must address as soon as possible to ensure you have access to your funds, so calling your bank to clarify what happened is usually the best course of action.

 

Do banks see pending deposits?

Apparently, pending deposits are visible to both banks and account holders, as they appear in your account as “pending.”

When a deposit is going through the standard verification process, it is usually not worth calling your bank to find out what is taking so long because the only information they will have is that the deposit is under authorization and ought to be available shortly.

Unless there has been a delay and you suspect an issue, your bank’s customer care team should be able to tell you whatever the issue is.

They might also be able to tell you if there’s anything you can do as the recipient or rather the sender to help the deposit go through.

 

Could it be possible for a bank to release a pending deposit early?

If you ask, some banks will release a pending deposit early for a fee. Only deposits that are likely to be authorized, such as a payroll check from your employer, will be affected.

Unfortunately, not every bank will offer this as an option, and some will only do so if the deposit is greater than or equal to a certain amount.

However, it will depend greatly on your bank’s policy initiatives.

As a result, the smartest thing you can do is speak with your bank directly to know what options they have based on your unique condition.

 

Is your available balance inclusive of pending transactions?

Pending transactions are not counted toward your available balance, but they do show up in your current balance. This is because your available balance indicates how much money you have left to spend, whereas your current balance depicts your entire financial picture.

This seems to be especially essential for financial planning, because if you’re about to make a large financial commitment, remember that you can only rely on having the amount in your remaining funds.

This is one of the reasons it is vital to understand the difference between your available and current balances, since the only money usable is the one that was in the account before the pending deposit came in.

 

Clearing times

Clearing times means the amount of time a bank takes settle a transaction.

If you have a lot of pending deposits and rely on them for a lot of your income, you should consider this when opening a bank account.

Clearing times are handled differently by different financial institutions.

Your bank should make its deposit policy and the time limit for pending deposits clear to you.

This will help you know if that bank is appropriate for you.

Cheques, for instance, they normally take longer to clear than other types of deposits.

It’s also worth noting that your bank is legally obligated to investigate suspicious or unusual behavior or conduct.

If you deposit a large cheque or amount into your account for the first time, your bank may keep the deposit pending for a longer period of time while it investigates the deposit more thoroughly.

 

Reasons why your cheque could be on hold?

Your cheque may be on hold for a variety of reasons.

The fact that your account is new is one of the most common reasons.

Banks frequently hold deposits or cheque for new accounts until they have cleared totally before releasing the balance.

When you have had a long relationship with your bank, they are more inclined to consider you reliable and deposit funds from a cheque into your account before it has approved fully.

Cheques deposited through an ATM are sometimes held by some banks.

Cheques deposited through a mobile banking app are also susceptible to this.

Although not all banks handle deposited cheques in this manner, it is still fairly common.

If you receive a deposit this way, keep this in mind because it may take longer to clear than usual.

 

How to know when the deposit is ready for use

Only when you deposit a cheque through an ATM or a teller, you must receive a receipt stating when the money will be useable in your account.

This is simply the quickest way to find out when your funds will be available.

Alternatively, you will have to check your account manually to see if the deposit has been released successfully.

Luckily some banks are advanced and they have apps that notify the account holder when the deposit has been cleared. This means funds are available for use.

Related:

Conclusion: If a deposit is pending, can I use the money?

I hope that this article has provided you with substantial information on pending deposit.

We have seen that pending deposits cannot be withdrawn since they have not been verified by the bank.

Pending deposits are a crucial part of personal banking that you should be aware of.

We have learnt it is very easy to get caught up in the excitement of a pending deposit and overspend, you can avoid overdraft fees by paying attention to when the deposit clears and realizes you do not yet have access to that money.

It is wise to avoid getting into trouble with the bank.

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