Postdated
Encyclopedia
In banking, postdated refers to checks
which have been written by the drawer for a date in the future. In the United States, postdated items are described in Article 3, Section 113 of the Uniform Commercial Code
. Postdated checks are often used in conjunction with payday loan
s.
Many banks will honor postdated checks, even if they are deposited before the postdate because they will hold on to the check until the check is able to be cashed in. In the United States
, national banks are permitted to pay checks even though payment occurs prior to the date of the check. According to the Comptroller of the Currency: "A check is a negotiable instrument
—the payee, the person to whom the check is written, may negotiate it through the banking system at any time". Nonetheless, if the bank has been given proper notice of the post-dating, the Uniform Commercial Code requires that the notice be honored, or the bank be held liable for damages.
In the United Kingdom
post-dating a cheque carries no legal weight and therefore such a cheque can be cashed before the due date. However a bank can refuse to accept them if the post-date is spotted; if it isn't, the payer has no right to take any form of legal action against the bank for letting the check be processed.
Cheque
A cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
which have been written by the drawer for a date in the future. In the United States, postdated items are described in Article 3, Section 113 of the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
. Postdated checks are often used in conjunction with payday loan
Payday loan
A payday loan is a small, short-term loan that is intended to cover a borrower's expenses until his or her next payday. The loans are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as a credit card...
s.
Many banks will honor postdated checks, even if they are deposited before the postdate because they will hold on to the check until the check is able to be cashed in. In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, national banks are permitted to pay checks even though payment occurs prior to the date of the check. According to the Comptroller of the Currency: "A check is a negotiable instrument
Negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. According to the Section 13 of the Negotiable Instruments Act, 1881 in India, a negotiable instrument means a promissory note, bill of exchange or cheque payable either...
—the payee, the person to whom the check is written, may negotiate it through the banking system at any time". Nonetheless, if the bank has been given proper notice of the post-dating, the Uniform Commercial Code requires that the notice be honored, or the bank be held liable for damages.
In the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
post-dating a cheque carries no legal weight and therefore such a cheque can be cashed before the due date. However a bank can refuse to accept them if the post-date is spotted; if it isn't, the payer has no right to take any form of legal action against the bank for letting the check be processed.