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Guide to post-dated checks: Are they legal, and can you cash them?
Read this before you write or accept a post-dated check.
A post-dated check is like a promise to pay someone at a later date. When you write a post-dated check, you essentially ask the recipient to wait and cash the check or deposit the funds at a specific point in the future.
While the laws on post-dated checks vary by state, it is generally legal to write them as long as you don't intend to defraud the payee. But whether or not it's legal to cash a post-dated check early depends on the circumstances.
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What is a post-dated check?
Post-dating, or "floating" a check, is the act of writing a future date in a check's "date" field. Usually, the date on a check matches the date it was written. But with a post-dated check, the check writer intends for you to wait until a future date to cash or deposit the funds.
Why would someone post-date a check? There are a few reasons you might want to write a future date on a check:
You're sending a payment before the due date, but don't want the check to be cashed early.
It's an IOU for funds you don't currently have on deposit but will have available at a later date.
It's required as collateral for a payday loan.
Is it legal to post-date a check?
The laws vary from one state to the next, but it is generally legal to post-date a check as long as you believe you'll have the funds available to cover the transaction. In other words, you can't use a post-dated check as a way to get out of paying bills or defraud a merchant.
If you apply for a payday loan, the lender can also legally ask you to write a post-dated check — usually dated no more than 31 days in the future — as a guarantee that you'll repay them for your loan.
Can a post-dated check be cashed prior to the written date?
For check writers, it's best to assume your post-dated check will be deposited immediately.
A bank or credit union can indeed cash your post-dated check as long as it's signed. And if you don't have the funds in your account, there's a chance the check will bounce and you'll have to pay non-sufficient funds fees or overdraft fees.
On the other hand, most states prohibit banks and credit unions from cashing post-dated checks if you've given them advance notice. You may need to verbally notify the financial institution within 14 days of when the payee attempts to cash the check or give written notice within six months. Your financial institution may also charge you a fee for delaying the deposit.
Whether or not other entities can cash post-dated checks depends on who it is. Debt collectors are not allowed to deposit post-dated checks early, but individuals might be able to. So if you give a post-dated check to a friend or family member, you may need to ask them to honor the date.
Should I accept a post-dated check?
Post-dated checks are not an ideal form of payment to receive. If the check issuer doesn't have the funds to pay you now, there's always a chance their account will come up short in the future. For that reason, you might want to ask for another form of payment, especially if you don't know the check writer personally or if the transaction is business-related.
Post-dated checks versus bad checks
While it's legal to write post-dated checks, it's a crime to intentionally write a bad check. A bad check is one that the check writer knows cannot be cashed for any number of reasons, including:
Their account won't have sufficient funds to cover the check.
They've requested a stop payment from the bank.
The account has been closed or is non-existent.
If you do intentionally write a bad check, you can be sued and face fines or even felony prison time.
Alternatives to post-dating a check
A post-dated check can be cashed or deposited early, so it's not a safe way to delay a payment. Depending on your situation, one or more of these alternatives could work better:
Set up automatic payments to be issued on or just before your due dates.
Ask creditors or other agencies if you can change your monthly due date.
Move your money to a checking account that gives you immediate access to your paycheck deposit, so you can pay your bills sooner.
If you're writing post-dated checks as collateral for payday loans, it's especially important to find an alternative, since you could be digging yourself into a deep financial hole. The APR on payday loans is usually above 400, and most borrowers end up in a debt cycle that involves taking on new payday loans to pay off old ones.
By comparison, a borrower with bad credit is better off taking out Payday Alternative Loan from a credit union, since the APR on these loans is capped at 28%.
To explore other strategies for managing bills, talk to a certified credit counselor at a nonprofit organization such as the National Foundation for Credit Counseling (NFCC) or American Consumer Credit Counseling (ACCC).