What is a post-dated check?

The dated check is a check that has a future date written on it.

Definition and Examples of Dated Check

A dated check is an ordinary check, but the person writing the check chooses to write a later date on it. This date could be tomorrow, next week, or even years from now. If it is later than the current date, it is considered a dated check.

How Does a Dated Check Work?

People typically date checks when they want the recipient (the person or company receiving the payment, also known as the payee) to wait before depositing the check. There are two possible reasons for this:

1. The person writing the check does not have enough funds at the time of writing the check, but those funds will be available on a future date.
2. The person writing the check is prepaying for something, either before the due date of the payment or before the completion of the service.

No Fraud Allowed

Dated checks are legal. However, it is illegal to write a check when you know that you do not have sufficient funds to cover the check, even if you hope to have the money later. It is also illegal to pretend to pay someone without any actual intention of doing so.

Not a Guarantee for the Check Writer

Just because it is legal to write a dated check does not mean that things will go as you intended. The date you choose does not form part of a legally binding agreement between you and the payee. In most cases, the recipient can deposit the check at any time, and the bank is free to pay out the funds from your account before the date specified on the check.

Although dating the check will not guarantee a delay, you can inform your bank not to cash a specific check until a certain date. Bank policies vary regarding how long they continue to monitor the check to prevent early payment.

You may also have to pay a fee for this service.

Tips for Receiving a Dated Check

In most cases, when you receive a dated check, you can deposit or cash it at any time. Debt collectors may be prohibited from processing the check before its date, but most individuals write dated checks to the bank immediately. However, if you agree to wait, cashing the check before the specified date could be considered a violation of a verbal agreement, and it may be illegal in some states.

It is wise to first communicate with the person who wrote the check – there may be a reason for dating it. If the account doesn’t have sufficient funds, the check may bounce, and you may incur insufficient funds or overdraft fees from your bank. You can try to recover those fees from the check writer, but collecting money from someone who already has little can take time, and if legal action is needed, it can be costly.

When you have a dated check, know if the check was dated intentionally and look for a solution.

Cashing a dated check can be harder compared to depositing it. Depositing the check allows the bank to place a hold on the funds while clearing the check, but cashing the check requires an immediate process. If you truly want to cash a dated check for the full amount, do so at the bank that issued the check (where the check writer has a checking account).

Who Pays If There Is a Problem?

In some cases, dated checks are deposited, and no one notices (they do not carefully check the date). Unless there is an issue or complaint, those checks are processed and forgotten.

However, a rejected payment (or an unexpected withdrawal from your checking account) can cause numerous problems. If you provided correct instructions to your bank and they paid out money from your account anyway, the bank should cover any overdraft fees that result from that. You may have additional rights against the bank regarding any other expenses you incur.

Alternatives

For Dated Checks

If you have the option, it’s best to avoid writing dated checks. The only way to ensure they work is to pay extra fees to your bank. If you are unwilling or unable to pay your bank fees to monitor your account, you are at the mercy of the person you give the check to. Even if the payee is honest, they may inadvertently make the honest mistake of forgetting that (which could leave you with a bad check fee).

Dated checks are often used because you are short on cash – and that’s exactly when you can’t afford additional fees. Instead of writing a dated check, try the following:

1. If you want to date the check for timing or convenience reasons (like being out of town and unable to pay at the usual time), schedule the payment through your bank’s electronic bill pay service.
2. If you need a few extra days for the funds to clear in your account, ask the payee to set an alternative payment date. Some payees may be happy to arrange a payment date that aligns well with your cash flow (as the due date will be a few days after your direct deposit payday).
3. Enroll in automatic electronic payment – but only if you trust the payee. Dishonest or disorganized companies may withdraw money from your account before you are ready.

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Thank you for your feedback!

Sources:
    – State of California Department of Justice. “Bad Checks.” Accessed June 28, 2021.
    – Consumer Reports. “Does Postdating a Check Prevent Anyone From Depositing It Early?” Accessed June 28, 2021.
    – Consumer Financial Protection Bureau. “Can a Bank or Credit Union Cash a Post-Dated Check Before the Date on the Check?” Accessed June 28, 2021.
    – Consumer Financial Protection Bureau. “My Bank/Credit Union Cashed a Post-Dated Check Even Though I Told Them About the Post-Dated Check Before They Received It. What Can I Do?” Accessed June 28, 2021.

Source: https://www.thebalancemoney.com/postdated-checks-315335

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