Holding funds and cheque hold category

It is a prudent practice for a financial institution to hold back funds from a cheque or other type of deposit to ensure that the funds have in fact been deposited into the account.

The holding period varies from four to eight days, depending on the amount deposited and the method used to make the deposit:^[1]

 

Type of deposit	Cheque ≤ $1,500	Cheque ˃ $1,500
Deposit at the counter	4 business days	7 business days
ATM or mobile deposit	5 business days	8 business days

 

Maximum holdback time for foreign currency cheques

The maximum holdback period for a foreign currency cheque deposit is 25 business days.

 

This applies to cheques deposited in Canada that are:

1. encoded with magnetic ink to allow character recognition.
2. not so damaged or mutilated as to be illegible by cheque clearing systems.
3. drawn on a business location for an institution located in Canada.
4. issued in Canadian dollars.

 

UNI is not required to comply with the above if:

1. we have reasonable grounds to believe that the deposit is being made for illegal or fraudulent purposes in connection with the account.
2. the account has been open for less than ninety (90) days.
3. the cheque has been endorsed more than once.
4. the cheque is being deposited six (6) or more months after the date of the cheque.

 

UNI is not required to comply with the above for a deposit made by a qualifying business if we have reasonable grounds to believe that there is a substantial increase in credit risk considering the following:

1. the company’s account has a growing overdraft that is not reduced by deposits.
2. a downgrade of the credit score or other behavioural ratings that may influence the company’s credit risk.
3. an unexplained change to the account deposit history for cheques or other items.
4. a high number of cheques or other deposited items rejected by other institutions, which may affect the available balance in the account.
5. the company is subject to a notice of bankruptcy or notice of action taken by creditors.
6. any other factors justifying such a decision.

 

The on-hold category is a threshold determined by UNI that allows a company to cash cheques without funds being held back. Contact the Client Contact Centre at 1 888 359-1357 or your account manager today to find out if your business can benefit.¹

For full details on holdbacks or other types of withholding, contact your account manager or business location.

• Holdback for an item in U.S. currency² 

• Withdrawals from ATMs 

• Direct payments 

• Cashing government cheques 

 

 

¹ An analysis of your situation by our team allows us to allocate an on-hold category that meets your needs.

² The holdback is applied to the value of the item converted to Canadian dollars if the account is in Canadian dollars.

 

[1] A qualifying business is one that has an authorized credit of less than $1 million, fewer than 500 employees and annual revenue of less than $50 million.