Stale-dated checks: What to do with them?

It may be tempting to merely reverse the expense and add the cash back into your general fund. Banks will not do so because of the accounting ramifications it can have. A lawyer can help you understand your rights and what actions you can take to protect yourself.

The IRS needs to reissue the check if it has been sitting around for longer than a year. The UCC guidelines that allow banks to deny checks after six months do not apply to certified checks. But a certified check that sits for too long may be subject to state abandoned property laws. Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. If you don’t have any luck contacting the check issuer, consider working with your bank.

What are the risks of cashing a stale-dated check?

Money orders are a substitute for checks and generally used for lower value transactions. If you’re trying to figure out if a cashier’s check or a money order would better suit your needs, read our article Cashier’s Check vs Money Order. Please note that it’s always possible that Western Union or U.S.P.S. have changed their rules. Contact the issuer of your money order to find out if they have an expiration date or charge fees against old money orders. If you found an old check made out to you, you should check with your bank and verify their policy. If you wrote a check that hasn’t been cashed, you may consider putting a stop payment on the old check.

A. Policy – This instruction establishes that checks issued by the College for payment of goods and services, refunds, payrolls and other considerations are to be void after one year of the date of issue. If a live check was issued, write a letter to the vendor stating that the check (indicate check number, date and amount) has not cleared the bank. If the vendor responds, you can move forward with a replacement check and voiding the outstanding check. The expiration of money orders depends on the laws of the state and the rules of the issuer.

Is There Anything I Can Do to Prevent a Stale Check from Being Honored?

So, generally speaking, personal and business checks are good for 6 months; however, some banks will accept older checks. So let’s say that as a business owner, you wrote a check to a vendor. Your checks provide instructions to the bank not to cash the check after 180 days. Eight months later, you realize that the vendor has still not cashed the check. A stale-dated federal treasury check is a check that has not been cashed within one year from the date of issue.

Financial institutions may still honour these items, but there is no obligation to do so. Government of Canada cheques, money orders and bank drafts do not ‘stale-date’. First, determine if it is a live check or not (such as an automatic withdrawal or credit card charge).

What is a cashier’s check and when should I…

Some banks may deposit checks if they have reason to believe that the issuer is legitimate, and the company has enough funds in its account to cover the check. A stop payment informs your bank that you do not want the check cashed. A stop order prevents the other business owner from cashing both the original and new checks. Certified checks are personal checks from a bank account owner who has drawn on the account and had the bank guarantee the check. In either case, banks are under no obligation to accept a check once it is deemed stale.

After that, you should contact the recipient of the check to see if they want a fresh check to replace the old one. Someone who wrote a personal check is probably not prepared for the hit their checking account balance will take if you cash it months later. Money orders don’t expire, but cashing in a money order late might cost you. The company that issued the money order could charge a nonrefundable fee that’s taken from the check amount if you don’t cash the money order within one to three years. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site.

Stale Dating Checks

A stale check is an undeposited or uncashed check that may be too old to be processed by a bank, credit union, or other financial institution. A stale check is also referred to as a stale-dated check or an expired check. The length of time that a check is considered to be valid will vary from state to state. Unclaimed Property is anything negotiable that has monetary value.

While a bank does have the right to refuse an old check — and even return it to the original issuer — it also might decide to honor it. Before trying to cash a stale-dated check, it might be a good idea to contact the bank that holds the account the check is drawn against to see what its policy is. Cancel the checks and remit the amount to an escheat revenue account in the fund that has established the ORF. Cancel the checks and remit the amount to an escheat revenue account in the fund from which the checks were drawn. When an employee turns in a stale-dated check which needs to be reissued, it will be verified, logged, and turned over to bank reconciliation, who will reissue the check.

The Small Account Problem

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• Please note that it’s always possible that Western Union or U.S.P.S. have changed their rules.
• Treasury (a federal tax refund, for example) are good for 12 months after the date they’re issued.
• That’s according to the Uniform Commercial Code (UCC), a set of laws governing commercial exchanges, including checks.
• The company that issued the money order could charge a nonrefundable fee that’s taken from the check amount if you don’t cash the money order within one to three years.
• If you hold onto a check for a while you run the risk of the account number or routing number changing or the check writer may have forgotten about the check and spent the money on something else.