Technically, you can deposit or cash a postdated check as soon as you receive it. That’s because postdating a check does not obligate the person who receives it or the bank to honor the date on the check. Realistically, the recipient of a post dated check may never notice that the check has been post dated, and so will record and deposit it at once. The bank is also unlikely to notice the date on the check, and in any case may have a policy of honoring all checks at once, irrespective of the check date.
This is because there could be possibilities that you may not be able to honour the cheque on the given future date. The possible reason could be expected funds have not come into the bank. straight line depreciation method definition, examples So, the story of the post-dated cheque is that you don’t have sufficient balance on the date the drawee demands the sum from you and you issue him a post-dated cheque with a future date.
This article discusses general laws about checks, postdating, and fraud.
(2) A cheque is not invalid by reason only that- (a) it is not dated; (b) it is antedated or post-dated; or (c) the date it bears is a Sunday. (1) Where a cheque, or any indorsement of a cheque, is dated, the date shall, unless the contrary is proved, be presumed to be the day on which the cheque was drawn or the indorsement made, as the case may be. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page.
- Processing 45,000,000 checks a day is tough enough, without looking at dates.
- Today, most of the banking process has been automated and banks rarely look at the date mentioned on the cheque.
- If you know that they’re responsible with money and the check should be good, regardless of when you cash it, then you may choose to go ahead and deposit it right away.
You can make any personal check that you’re writing a postdated check simply by writing a future date in the date section. How far out you push the date can depend on what the check is for and your reasons for postdating it. Payday loans customers frequently use postdated checks to repay their lenders.
Postdating Checks Is a Waste of Time — Here’s Why
Imagine you decide to rent an apartment at a cost of $1,000 per month as of June 1st. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors. Under Australian law a post-dated cheque is valid under the Cheques and Payment Orders Act 1986. “It’s kind of a tricky scenario,” says Matt Foster, founder of the rental property search site iRent and a landlord in Ventura, California. The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, “The Law Q&A,” ran in the Champaign News Gazette.
What Does It Mean When a Check Is Postdated?
Let’s lay the foundation by understanding first what a simple bank cheque is. The material provided on the Incorporated.Zone’s website is for general information purposes only. In commercial transactions, banks are also given the right to process a check to the extent it is valid and correctly written. However, there are instances that you can get in trouble for writing a worthless check. However, you know that next week, your employer will deposit your paycheck in your account for $1,500 (increasing your account balance to $1,800).
Legal Comment
Whether a post-dated cheque may be cashed or deposited before the date written on it depends on the country. A Canadian bank, for example, is not supposed to process a post-dated cheque and if it does so by mistake, the cheque writer may ask their bank to correct the error. Since a time lag exists between when a person writes a postdated check and when a banker cashes it, sensitive information can remain exposed and vulnerable for days, weeks, or even a month.
We believe everyone should be able to make financial decisions with confidence. Now we know the definition of cheque, let’s understand post-dated cheque. With the concept of cheques now behind us, it should be much easier to understand the concept of Post-dated Cheques. As you can see in the image of a sample cheque above, several blanks need to be filled in before you send the cheque to be honoured by the bank. Your August 1st posted check will be cashable as of August 1st, and so on.
Debt collectors may be prohibited from processing a check before the date on the check, but most individuals are free to take postdated checks to the bank immediately. That said, if you agreed to wait, cashing the check prematurely might be considered in violation of an oral agreement, and that could be illegal in some jurisdictions. 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. Postdated checks are functionally similar to promissory notes in that they are both promises to pay at some time in the future. Generally, the law does not prohibit the use of postdated checks, absent any fraud.
In some cases, direct evidence may exist that proves that the defendant wrote the postdated check with the intent to cheat the recipient out of goods or services. In such cases, the defendant’s admission, if believed, would provide the required proof of the defendant’s criminal intent to defraud the victim with a postdated check. Postdating a check refers to writing a check but putting a future date on the check instead of the date that the person writes the check. People typically postdate checks intending that the recipient not deposit or cash the check until a later date, because payment is not due until that later date. For example, someone might mail a check for a utility bill before payment is due, and put the bill’s due date (not the date the check is being written) on the check. People should report all their taxable income and wait to file until they receive all income related documents.