Comments on: Banking 101: The Five Points of Negotiability

By: David Carlson

David Carlson — Thu, 20 Aug 2009 06:44:27 +0000

Thanks for the information. While some of this might seem no-brainer, I wouldn’t be surprised if lots of ppl came to a credit union or bank with a check from a year ago. Cash those paychecks fast! I know someone who I worked with who forgot to deposit a paycheck, so basically they lost out on $600. A costly mistake!

-DC

By: Kristy

Kristy — Wed, 19 Aug 2009 05:10:24 +0000

@ Dee – It can be, but not always. It’s the maker’s financial institution’s choice to pay it, as I said. It’s still considered non-negotiable (refused) to those who choose not to pay it, even though the federal government will consider it negotiable. The decision whether or not to actually conduct the transaction still lies with the financial institution, which is why the Treasury tells you to seek restitution from the person who wrote you the check. To be honest, I don’t think it will be very long at all before financial institutions just make it a practice to always accept them, but for now, they’re still returned all the time. The credit union I work for refuses them, and we send them back when other institutions try to collect.

By: Dee

Dee — Wed, 19 Aug 2009 04:13:36 +0000

My understanding has been that a postdated check can always be cashed immediately.

“Yes. National banks are permitted to pay checks even though payment occurs prior to the date of the check. A check is a negotiable instrument—the payee, the person to whom the check is written, may negotiate it through the banking system at any time.

If you have incurred damages because a check has been negotiated before its date, you should directly pursue the payee for restitution.”

-U.S. Dept. of the Treasury

http://www.helpwithmybank.gov/faqs/banking_check_cashing.html#drop02