It is legal for an individual to postdate a check, as well as for a bank to cash or deposit it. Postdated checks are normal checks, but the person writing the check chooses to write a later date on it. While postdating a check won’t guarantee a delay, you can specifically instruct your bank not to cash a certain check until a certain day.

Where a demand for payment of a cheque is made before the date of the cheque arrives, the cheque shall not, by reason of the demand, be taken to have been duly presented for payment. Every day, our world becomes more technologically advanced, changing many aspects of our lives—including the way we bank. Read on to learn more about online banking and how it can benefit you. If you want a basic checking account with no monthly maintenance fee, or an interest-earning checking account, we’ve got the options that are right for you.

What is a Postdated Check?

People can postdate several types of payment methods, including checks and electronic payments. Payments may be postdated in a number of circumstances, including if someone sets up a payment arrangement with a creditor or when there are regular monthly payments set to come out of an account. Postdated payments cannot be withdrawn from an account until the date specified. Auditors do not like to see post dated checks, since it implies that the payer is short on cash, and is attempting to pay bills later than it should.

Cashing a postdated check might be more difficult than depositing it. Depositing allows your bank to place a hold on the funds while the check clears, but cashing a check requires an immediate transaction. If you really want to cash a postdated check for the full amount, take it to the bank that issued the check (where the check writer has a checking account). It’s wise to communicate first with whoever why does a company use a standard costing system wrote the check—there’s probably a reason it’s postdated. If the account does not have sufficient funds, the check might bounce, and you might have to pay insufficient funds or overdraft fees to your bank. You can try to get those fees reimbursed by the check writer, but collecting from somebody who’s already low on funds can be time-consuming, and if legal action is required, it could be expensive.

A postdated check is one that is written with a future date indicated on it. This is usually done to account for an anticipated delay in deposit. For example, you may decide you would like to postdate a check if you are sending in a bill payment earlier than the due date. It is also common to postdate a check if there are insufficient funds in the checking account at the time the check is written.

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If you are concerned about overdrafting — and you’d rather not deal with a returned check and your landlord’s ire — consider switching to a bank with a solid overdraft policies. All of these charge lower than average overdraft fees and offer free ways to avoid that fee while still paying your bills. However, postdating a check can lead to inconveniences and ill feelings for the payee, such as when a tenant sends a rent check and may or may not have the funds ready to be withdrawn. Our partners cannot pay us to guarantee favorable reviews of their products or services. For example, assume that today is January 1, and you’re writing a check. In general, you’d put the current date of January 1 on the check, but you could just as easily postdate it a week and write January 8 on the check, instead.

1. If you’re unwilling or unable to pay your bank to monitor your account, you’re at the mercy of whoever you give the check to.
2. The bank is also unlikely to notice the date on the check, and in any case may have a policy of honoring all checks at once, irrespective of the check date.
3. Luckily for them, Foster waits to cash postdated checks, but he isn’t legally obligated.
4. The Uniform Commercial Code (UCC) enables lenders to loan money, secured by a borrower’s personal property.

A post-dated check (or post-dated cheque) is a check written with a future date. In other words, the date that appears on the check is after the date when the check was written. Even with a future date appearing on the check, the check could clear (be paid from) the bank account prior to that date.

Practical Use of a Post Dated Check

Banks have different policies for how long they will continue to monitor to prevent premature payment. However, it is illegal to write a check when you know you don’t have the funds to cover it, even if you hope to have the funds later. It is also illegal to pretend to pay someone without actually intending to do so. You’re writing a check to your landlord, but you don’t have enough money in your account. So you date the check a few days in advance — also called postdating it — hoping your paycheck will clear by then.

However, a rejected payment (or an unexpected withdrawal from your checking account) can cause numerous problems. If you properly provided instructions to your bank and they pay funds from your account anyway, your bank should be required to cover any overdraft charges that result. You may have further recourse against your bank for any other expenses you face. In some cases, postdated checks get deposited, and nobody ever notices (they don’t look closely at the date). Unless there’s a problem or complaint, those checks are processed and forgotten about.

This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. From the perspective of the payer, the best way to ensure that funds are not released early is to notify the bank not to release funds against this check any earlier than the date stated on the check. See NerdWallet’s picks for the best high-yield online savings accounts. Hintz says that only criminal intent, such as intentionally not having enough money for a payment, can be grounds for check fraud.

Financial instruments such as money orders and bank drafts cannot be postdated because you must pay for them up front. From the perspective of the check issuer, there should be no journal entry to record the reduction in cash until the date listed https://www.quick-bookkeeping.net/cost-variance-formula-analysis-how-to-calculate/ on the check. From the perspective of the recipient, there should be no entry to record the increase in cash until the date listed on the check. Thus, the date on the check effectively postpones the underlying accounting transaction.