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This guide is designed to help answer many of the questions you might have about cheques that are placed "on hold." We also provide some tips so that you may have peace-of-mind when you accept a cheque as payment or reimbursement for goods or services.For purposes of the Hold policy:
Our Hold Policy follows the regulations set out in the Bank Act. The cheque clearing system for the financial services industry is guided by rules established by the Canadian Payments Association (CPA).
Individuals and businesses are ultimately responsible for the items they deposit in their bank accounts. Generally a cheque can clear but only be considered validated when money is taken out of the account of the person who wrote the cheque and the intended recipient has received the funds in their account. Cheques can be returned for a variety of reasons in a variety of time frames based on the CPA rules. This is why it is so important to take precautions and be aware of the circumstances under which you accept a cheque, especially if you are accepting a cheque for a large amount from someone you do not know. You are financially responsible for items deposited or cashed both before and after the hold period.
During the hold period, funds for cheques and other negotiable items deposited to your account may not all be accessed immediately.
The hold period allows the Bank to verify that funds will be available from the account at the other financial institution on which the cheques and other negotiable items are drawn.
Our Hold Policy is explained in, and is subject to, the account agreement that governs your account. For example, if a cheque you deposit is returned to RBC for any reason, either during or after the expiry of the applicable hold period, RBC has the right to charge the amount of the cheque/item to your account. Holds are placed on some deposited items to protect both clients and the Bank from fraud.
When accepting cheque/items for deposit to your account:
If you are concerned with any of the above, please speak with your local RBC Royal Bank® branch or call 1-800-769-2511 for personal clients or 1-800-769-2520 for business clients for assistance.
The length of the hold period can vary depending on the location of the issuing financial institution. In general, the period of time required to verify if there are sufficient funds available in the account at the other financial institution is:
Important: The expiry of the hold period does not mean that the item will not be subsequently returned for some other reason. You are financially responsible for items deposited or cashed both before and after the hold period.
Placing holds on cheques is not new. A financial institution must protect its depositors and shareholders from losses due to the negotiation of bad cheques. When a cheque is deposited, the financial institution will generally hold the item until it can verify that sufficient funds are available in the account at the other financial institution. However, this does not guarantee that the item will not be returned at a later date for some other reason. Please refer to http://www.cdnpay.ca/imis15/eng/FAQs/eng/FAQs.aspx for additional factors considered when placing holds.
Yes, although there is always a risk associated with the subsequent return of the item deposited/cashed. Cheques written to you by people you know and trust are generally safe.
If you are concerned with the cheque/negotiable item provided or you are unfamiliar with the sender, please contact your local RBC Royal Bank branch or call 1-800-769-2511 for personal clients or 1-800-769-2520 for business clients.
Additional steps/measures can be taken to minimize the risk of your item being returned.
A financial institution's decision whether or not to place a hold on funds is a business decision. However, if a financial institution decides to place a hold on funds, it will generally hold an item for the number of days likely required for the item to reach the branch/financial institution that holds the account on which it was written and, to determine if there are sufficient funds in that account. For more detailed information regarding industry standards on Cheques and Holds on Cheques visit the Canadian Payments Association Website .
Yes. Once the hold is lifted, all the funds are made available in your account. However, the item may still be returned after the hold period for reasons other than insufficient funds. The lifting of the hold does not guarantee that an item will not be returned. If you are concerned, please contact your local branch for assistance.
Although the Bank does not guarantee that a cheque/item deposited will not be returned at a later date, you can ask yourself the questions set out above in "Tips and Questions to Consider," to help you understand the risks associated with a particular item. Your responses should provide you with an indication/comfort level with respect to the items being negotiated. If you are uncomfortable with the potential risk associated with the item being cashed/deposited (based on your responses), please contact your local branch as per the above for assistance.
If your account has enough funds to cover the item subsequently returned, it will not affect your credit rating. If, however, your account is put into an overdraft position, exceeding the approved limit, this could affect your credit rating if not dealt with immediately. Please contact your branch immediately if this happens to you.
As our client, you are financially responsible for all items presented to us for deposit or to be cashed and for the potential return of the item, regardless of any applicable hold period.
Should you have any additional concerns regarding our hold policy or are concerned about an item given to you, please contact your local RBC Royal Bank branch or call:
Please refer to your Client Agreement-Personal Deposit Accounts (for personal accounts) and the Financial Services Agreement (for business accounts), and/or our Policy on Holds for additional information regarding our holds policy. For an industry perspective, please refer to the Canadian Payments Association Website for additional information on Cheques and Holds on Cheques.
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