A hold can be placed on your checking account for a variety of reasons. A hold means that the bank will not release a certain amount of the funds to you for a specific period of time. The most common reason that they do this is because the check is large or because it is suspicious. Insurance checks are one example of a type of check that almost always has a hold placed on it, because it is not uncommon for them to be returned to the bank, and not be paid.
The way the process works is that the teller looks at your deposit and your checks to see if there are any that raises alarms. If the check is particularly large, and if it is from out of state, then the bank is much more likely to place a hold on it. Often the teller will call the bank that it is issued from to see if the funds are available as well. Once they have determined that a hold needs to be placed, they fill out the paperwork (which may be a form on their computers) and send it in. The hold is usually set for five business days if it is an instate check; if the check is from out of state it will be a two week hold. The bank should notify you if they have placed your account on hold.
The reason for the hold is that the banks want to make sure that they receive the money from the other bank before you spend it all. It can take up to two weeks and occasionally longer for the check to go through the proper clearinghouses and for the funds to actually transfer to your account. When you make smaller deposits the bank lets you have the credit right away because they think you can absorb the costs if it doesn’t clear, but most people would not be able to absorb or cover a check that was $10,000. If you had already spent the money you would have to find a way to replace it within a few days. The hold is for your protection, as well as for the banks.
If you have a question as to why your money is not available, you should call and speak to a customer service representative. They may refer you to the teller or supervisor that put the hold on your account. You can also check to see if the money has come through, and then request that the hold be lifted a few days if it is has. Otherwise it is just best to wait to spend the money, until you know that you really do have it. If you become frustrated with the process you may end up hating your bank, which may lead you to close your account. However, most banks operate under the same policy when it comes to placing holds, so you should carefully consider the ramifications before you close your account.