For example, assume that today is January 1, and you’re writing a check. In general, you’d put the current date of January 1 on the check, but you could just as easily postdate it a week and write January 8 on the check, instead.
How Does a Postdated Check Work?
People usually postdate checks when they want the recipient (the person or business receiving the payment, also known as the payee) to wait before depositing the check. Two potential reasons for this include:
The check writer does not have sufficient funds available when writing the check, but those funds will be available on a future date. The check writer is paying for something ahead of time, either before the payment is due or before the service has been completed.
No Fraud Allowed
Postdated checks are legal. However, it is illegal to write a check when you know you don’t have the funds to cover it, even if you hope to have the funds later. It is also illegal to pretend to pay someone without actually intending to do so.
Not a Guarantee for Check Writer
Just because it’s legal to write a postdated check doesn’t mean things will work out the way you intended. The date you choose to use is not part of a legally binding agreement between you and the payee. In most cases, the recipient can deposit the check at any time, and the bank is free to pay funds out of your account before the date shown on your check. While postdating a check won’t guarantee a delay, you can specifically instruct your bank not to cash a certain check until a certain day. Banks have different policies for how long they will continue to monitor to prevent premature payment.
Tips for Receiving a Postdated Check
In most cases, when you receive a postdated check, you can deposit or cash a postdated check at any time. 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. It’s wise to communicate first with whoever wrote the check—there’s probably a reason it’s postdated. If the account does not have sufficient funds, the check might bounce, and you might have to pay insufficient funds or overdraft fees to your bank. You can try to get those fees reimbursed by the check writer, but collecting from somebody who’s already low on funds can be time-consuming, and if legal action is required, it could be expensive. Cashing a postdated check might be more difficult than depositing it. Depositing allows your bank to place a hold on the funds while the check clears, but cashing a check requires an immediate transaction. If you really want to cash a postdated check for the full amount, take it to the bank that issued the check (where the check writer has a checking account).
Who Pays if There’s a Problem?
In some cases, postdated checks get deposited, and nobody ever notices (they don’t look closely at the date). Unless there’s a problem or complaint, those checks are processed and forgotten about. However, a rejected payment (or an unexpected withdrawal from your checking account) can cause numerous problems. If you properly provided instructions to your bank and they pay funds from your account anyway, your bank should be required to cover any overdraft charges that result. You may have further recourse against your bank for any other expenses you face.
Alternatives to Postdated Checks
If you have the option, it is best to avoid writing postdated checks. The only way to guarantee they’ll actually work is to pay extra fees to your bank. If you’re unwilling or unable to pay your bank to monitor your account, you’re at the mercy of whoever you give the check to. Even if your payee is honest, they may make the honest mistake of forgetting (potentially leaving you with bad check fees). Usually, postdated checks are used because you’re short on money—and that’s exactly when you can’t afford extra fees. Instead of writing a postdated check, try the following:
If you’re postdating a check for timing or convenience reasons (say you’ll be out of town and unable to pay when you usually do), schedule the payment through your bank’s online bill payment service. If you need a few extra days for funds to clear in your account, ask your payee for an alternate payment date. Some billers are happy to arrange a payment date that works well with your cash flow. (They’ll make your due date a few days after your direct deposit typically comes in.) Sign up for automatic electronic payments—but only if you trust the payee. Dishonest or disorganized businesses may make withdrawals from your account before you’re ready.
