If you need to write a check but don’t want it to be cashed right away, you might choose to “postdate” it. So how do postdated checks work – and are they even legal? Here’s what you need to know.
What Is a Postdated Check?
A postdated check is a check with a future date written on it. For example, if today’s date is July 25, 2023, and you write a check with the date July 30, 2023, on it, you’ve written a postdated check.
A postdated check indicates that the check-writer wants the check cashed on or after the date listed. So why would you want to delay the date a check gets cashed? There are a few reasons. Maybe you need to pay a bill but the due date is still a ways off. Or perhaps you owe someone money but you won’t have the funds available until a later date.
Is It Illegal to Postdate a Check?
In general, postdating a check is legal in the U.S. “It’s like setting a timer on your payment,” says James Allen, a certified financial planner and founder of Billpin.com. “However, the legality becomes murky if the check is written with the intent to defraud, such as writing a postdated check while knowing there won’t be enough funds in the account to cover it when the date arrives.”
Many financial institutions will still process postdated checks if they’re deposited before the date that’s written on them. There’s nothing forcing the person who received the check to wait to cash it until the date written on the check. That means the person or business you’ve written the check to might be able to deposit it and withdraw the money from your account before you were ready, potentially leading to overdrafts or bounced checks if you don’t have enough money in your account.
What Happens If My Postdated Check Gets Cashed?
If your postdated check gets cashed before the date you’ve written on it, a few things can happen.
First, the check might clear without issues. If there are enough funds in your account to cover the check, it will clear just like any other check, regardless of the date you’ve written on it.
However, if there aren’t enough funds in your account to cover the check when it’s cashed, it will bounce. This means the person or business you wrote the check to won’t get their money, and your bank will likely charge you a fee. The person or business you wrote the check to might also charge you a returned check fee.
You could also overdraft. If your bank offers overdraft protection, it might allow the check to go through even if you don’t have enough money in your account. This will put your account in the negative, and you’ll likely have to pay an overdraft fee.
If you postdated a check and it was cashed early, you can try talking to your bank about it. Some banks might be willing to waive fees associated with the check being cashed early, especially if it’s a one-time occurrence. However, banks are under no obligation to respect the date written on a check. Therefore, it’s generally a good idea to make sure you have enough money in your account to cover a check as soon as you write it, even if you’ve postdated it.
Alternatives to Postdating a Check
Postdating a check isn’t the most reliable strategy for ensuring a payment doesn’t go through until you’re ready. Instead, consider these alternatives:
- Ask about a payment plan. If you don’t have the funds on hand to pay a bill in full, talk to your provider about an alternative plan. “You could explore payment plan options with the billing company, which is akin to setting up a layaway plan for your payments,” Allen says.
- Schedule an electronic payment. Most banks offer online bill payment services that let you schedule payments on the date you choose. “You can schedule future payments … much like setting a digital alarm clock for your payments,” Allen says.
- Charge a credit card. If it’s a one-time expense that you don’t have the funds to cover, you could consider charging the expense to your credit card and then paying it off when your bill comes due. Just be sure to pay it off in full, otherwise you’ll be charged interest.
- Use a money order or cashier’s check. These are prepaid, so the recipient doesn’t have to worry about whether there’s enough money to cover the amount. But keep in mind that you might have to pay associated fees.
- Set up a reminder. If none of these options works for you, simply set a reminder to make the payment on the correct date. Just make sure you have a reliable system in place, like calendar alerts, so you don’t forget.
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