Cheque Hold Policy

Personal Accounts
Small and Medium-Sized Business Accounts


Business Day – refers to regular weekdays only and excludes Saturdays, Sundays, bank holidays and Federal or Provincial statutory holidays.

Cheque – includes certified cheques, money orders, bank drafts and other instruments.

Effort Trust Account – refers to personal deposit accounts held by individuals and deposit accounts held by small and medium-sized businesses.

Small and Medium-Sized Businesses – refers to businesses with authorized credit of less than $1 million, fewer than 500 employees, and annual revenues of less than $5 million.

Why Does Effort Trust Hold Funds Deposited by Cheque?

When you deposit a cheque into your Effort Trust account, you may not be able to access the full amount of the funds from that deposit immediately. Effort Trust might hold the funds you deposit by cheque for several reasons, including:

  • To make sure that the cheque is drawn on a valid account and that the person or company issuing the cheque has the money to cover the cheque.
  • To make sure that the person or company issuing the cheque has not put a “stop payment” order on the cheque. A stop payment order is placed on a cheque if, for some reason, the person or company issuing the cheque does not want it to be cashed.

When you deposit a cheque into your Effort Trust account, Effort Trust sends the cheque to the cheque writer’s financial institution to have the money released. Until this happens, the money is not withdrawn from the cheque writer’s account. This means that when you deposit a cheque, Effort Trust cannot be sure that there is enough money in the cheque writer’s account (that is, whether the cheque will “clear”).

It usually takes a few business days for Effort Trust to ensure that a cheque has passed through the payment system and has been accepted by the cheque writer’s financial institution. There may also be additional delays – for example, if the cheque is drawn on an account located in another province or country.

Effort Trust may apply a hold on funds deposited by cheque to protect itself and its depositors from losses. The hold period is a method of managing certain risks (for example, fraud) in cashing cheques.

How Does the Cheque Hold Policy Work?

If your deposit is subject to a hold, the full amount of the deposit will be reflected in your account balance right away. However, your ability to access all of those funds, or a portion of them, will be restricted. You will be unable to withdraw money from the funds being held, and we will not pay any of your cheques or pre-authorized debits from those funds, until the funds are released at the end of the hold period.

As it is a credit decision, our cheque hold policy is applied differently for each customer. We may at any time advise you that we are placing a full or partial hold on a particular cheque presented by you. That decision will depend on a number of factors including:

  • your history of returned cheques because of insufficient funds;
  • the length of time you have dealt with Effort Trust;
  • the amount of funds already in your account; and
  • the amount and type of cheque being deposited.

How Long is the Hold Period?

The length of the hold periodfor cheques deposited to an Effort Trust account will be for the following number of business days:

Maximum Hold Period
  • Cheques which are:
    • issued in Canadian dollars and drawn on an account at a financial institution branch located in Canada; and
    • encoded with magnetic ink character recognition and can be read by processing machines (i.e. not damaged or mutilated).
  • Cheques up to and including $1,500
  • Cheques greater than $1,500
  • 4 business days
  • 7 business days
  • All other cheques drawn on an account at a financial institution branch located in Canada
  • 15 business days
  • Cheques drawn on a financial institution located in the U.S.
  • 20 business days
  • Cheques drawn on a financial institution located outside of Canada or the U.S.
  • 30 business days
Note – All cheques must be in Canadian Funds. We do not accept foreign currency.

When does the Hold Period Begin?

For in-branch deposits, the hold period begins on the first business day following the date of your deposit. If you mail or deliver a cheque to us, the hold period begins on the first business day following the date that we receive the cheque.

What Happens After the Expiry of the Hold Period?

After the expiry of the hold period, you may access the funds. However, a hold provides no guarantee that a cheque will not be returned as invalid or otherwise after the hold period has expired. Ultimately, you are responsible for any cheque that you deposit that is returned to us, regardless of whether any hold period has expired. If it is returned after the hold period, we will charge the amount of the cheque to your account.

Extension of the Maximum Hold Period

We may extend the maximum hold period for a cheque if we:

  • have reasonable grounds to believe there may be illegal or fraudulent activity in relation to the account or there are any other indicators of a suspicious transaction, such as those required to be reported under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act; or
  • your Effort Trust account has been opened for 90 days or less; or
  • the cheque that you are depositing has been endorsed more than once; or
  • the cheque you are depositing is more than 6 months old; or
  • for small and medium-sized businesses, the maximum hold period may also be extended where we reasonably believe there is a material increased credit risk.

If we are extending the hold period for a particular cheque, we will inform you about this in writing when you deposit the cheque.

Material Increased Credit Risk (for Small and Medium-Sized Businesses)

For the purposes of this policy, we may reasonably believe that there is material increased credit risk based on factors such as:

  • an escalating overdraft balance that is not being reduced by deposits received; or
  • a negative change in a small and medium-sized business’s credit score; or
  • an unexplained change in the history of cheques deposited to the account (for example, normal deposit is $1,000 and now daily deposit is $10,000); or
  • high numbers of returned cheques returned because of insufficient funds; or
  • notice of bankruptcy proceeding or creditor action against a small and medium-sized business.