What is Check?

A check is a written, dated, and signed negotiable instrument that orders a bank to pay a specific amount of money from the drawer's checking account to the payee named on the instrument. Checks are governed primarily by Article 3 and Article 4 of the Uniform Commercial Code (UCC), adopted in all 50 states, and by federal regulations including the Expedited Funds Availability Act (Regulation CC) and the Check Clearing for the 21st Century Act (Check 21).

Under Regulation CC, banks must make funds from deposited checks available within specified timeframes. For most checks, the first $225 must be available by the next business day, with the remainder available by the second business day after deposit. Certain exceptions — new accounts, large deposits over $5,525, redeposited checks, and repeated overdrafts — permit longer hold periods. Check 21, enacted in 2003, created the substitute check — a paper reproduction of the original check that is the legal equivalent of the original for all purposes — enabling electronic check processing and dramatically reducing float times.

The Federal Reserve's check-services infrastructure processes checks through a nearly entirely electronic system. The Check 21 Act also created an expedited recredit procedure: if a consumer suffers a loss due to a substitute check, the bank must recredit the account within 10 business days (or 5 business days after receiving the claim, whichever is later) while the claim is investigated.