This means that the instrument used to make the payment is dated for a specific date in the future. Postdated checks are normal checks, but the person writing the check chooses to write a later date on it. With features like online bill pay, mobile banking, and automatic transfers, you can make payments on time without the uncertainty of postdating checks. Visit a PNC branch, go online, or call us to discuss your options and discover how stress-free banking can be when you have the right tools at your fingertips.
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. For instance, someone with a car loan can schedule postdated payments to be transferred electronically from their account to the lender. From the perspective of the check issuer, there should be no journal entry to record the reduction in cash until the date listed 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.
Hintz says that only criminal intent, such as intentionally not having enough money for a payment, can be grounds for check fraud. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website common size financial statement or click to take an action on their website. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program. However, it’s important to note that payees are not required to honor your request.
Alternatives to Postdated Checks
This type of arrangement is only made if the drawer wants to make payment at a particular date in the future. A post dated check validity is normally 3 months but may vary with the rules and regulations of a country. A postdated check has the same effect as if it had not been issued until the day that it is dated and is not payable until that date.
A post dated check is turbotax support contact us page a check on which the issuer has stated a date later than the current date. It is used when the issuer wants to delay payment to the recipient, while the recipient may accept it simply because the check represents a firm date on which it will be able to deposit the check. This approach is used to improve the odds of being paid, especially when the issuer has little credit. XYZ Ltd. is a private company dealing in computer accessories manufacturing. The company must purchase different components as raw materials to assemble them as the final product. The company is a bit short of cash and will soon pay its customers as the cash collection begins in a month.
Adopted by nearly every state, the UCC is a standard set of business laws that was first published in 1952 to regulate financial contracts. Article 3, Section 113 of the UCC outlines the rules for postdated checks. This section allows financial instruments to be either post or backdated and indicates that the payment cannot be made until the specified date on the instrument. A postdated check is simply a check that has been written with a future date. Essentially, it’s a way to ask the payee not to cash the check until the indicated date. This is commonly done to help ensure that the check amount is not withdrawn from the account until additional funds can be deposited.
How Postdating Works
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). If a postdated check is cashed early and there’s not enough to cover it, the bank may not clear the check and instead may return it due to insufficient funds. Banks and credit unions generally state rules about postdated checks in their account disclosures. Some of the biggest banks, for example, note specifically that they can honor checks that are made out for future dates. Luckily for them, Foster waits to cash postdated checks, but he isn’t legally obligated.
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He receives checks from some renters on the 28th or 29th of the month that are dated for the first of the next month. He suspects his tenants do this to keep him from cashing their rent checks before they’ve been paid, so their rent checks don’t bounce. The validity of a post-dated check is only good for three months after the date printed on the document.
Depending on your relationship with the payee, this may or may not be a viable option. With $0 minimum to open online and Low Cash Mode® to help avoid overdrafts. “It’s kind of a tricky scenario,” says Matt Foster, founder of the rental property search site iRent and a landlord in Ventura, California.
- Just because it’s legal to write a postdated check doesn’t mean things will work out the way you intended.
- This site may be compensated through the bank advertiser Affiliate Program.
- XYZ Ltd. is a private company dealing in computer accessories manufacturing.
- Financial instruments such as money orders and bank drafts cannot be postdated because you must pay for them up front.
- For example, assume that today is January 1, and you’re writing a check.
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. Banks have different policies for how long they will continue to monitor to prevent premature payment. Sometimes, the simplest solution is to discuss the situation with the person or entity you’re paying. Whether it’s your landlord, a service provider, or a family member, explaining your timing issue may allow you to negotiate a new payment date. Often, recipients are willing to wait a few extra days for payment if they’re informed in advance and trust the payer.
The supplier agrees to hold the check and only present them on the given dates with the commitment from the business that both checks will be honored and paid by the bank on the specific dates. Thus, the supplier should not debit cash and credit account receivables on the date the supplier received the check. Such a check is a negotiable instrument with a future date written on it. The inheritance payment does not arrive on time, so the check bounces.
In most cases, the recipient can deposit the check at any time, and the bank is free to pay funds out of your account before the date shown on your check. These will again lead to the payment of insufficient fund fees or overdraft fees which the bank will collect as a penalty from the check issuer or the payer. Banks in the US and UK will not need to check the check date unless the issuer has typically mentioned not to release the payment before the said date.