Personal Finance

Hold on Government cheque

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  • Apr 14th, 2010 9:41 am
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[OP]
Sr. Member
Jun 12, 2008
621 posts
64 upvotes
Ripley

Hold on Government cheque

I took my Tax Return to the bank today and deposited it at the teller. The bank (CIBC) put a 5 day hold on it. huh? It is a government cheque. Why would they put a hold on it? I understand with an atm deposit but shouldn't this be different?

I actually need the money tomorrow to pay for our new to us vehicle so I asked to get the hold removed. They did a soft credit cheque (without asking me first) and deemed me 'special' enough to let it go. I have been a customer since 1996 and have had a car loan there that I paid in full back in 2001. I have a really good credit score but will this soft check effect it? I want to renegotiate my mortgage soon and don't want this to effect it. I am paying 100% cash for this car because I didn't want it to look like I was out shopping for credit close together - car and then mortgage. And what if I had taken the cheque in and just wanted to cash it? Is that even possible?

Another question - the bank recommended I pay for the car with a money order instead of a certified cheque? What is that about? Is one more expensive than the other? I have only used certified cheques before.

I need to mention - our main bank is PCF and I love them. Having a bricks and mortar hasn't made it any easier to get to our money!

And yes, I realize having it direct deposited might have avoided this but because we have two banks and I hate the hold on transferring it I like getting a paper cheque and putting it where I want to.
5 replies
Deal Addict
Mar 6, 2005
4873 posts
430 upvotes
zeddy wrote:
Apr 14th, 2010 2:56 am
I took my Tax Return to the bank today and deposited it at the teller. The bank (CIBC) put a 5 day hold on it. huh? It is a government cheque. Why would they put a hold on it? I understand with an atm deposit but shouldn't this be different?

I actually need the money tomorrow to pay for our new to us vehicle so I asked to get the hold removed. They did a soft credit cheque (without asking me first) and deemed me 'special' enough to let it go. I have been a customer since 1996 and have had a car loan there that I paid in full back in 2001. I have a really good credit score but will this soft check effect it? I want to renegotiate my mortgage soon and don't want this to effect it. I am paying 100% cash for this car because I didn't want it to look like I was out shopping for credit close together - car and then mortgage. And what if I had taken the cheque in and just wanted to cash it? Is that even possible?

Another question - the bank recommended I pay for the car with a money order instead of a certified cheque? What is that about? Is one more expensive than the other? I have only used certified cheques before.

I need to mention - our main bank is PCF and I love them. Having a bricks and mortar hasn't made it any easier to get to our money!

And yes, I realize having it direct deposited might have avoided this but because we have two banks and I hate the hold on transferring it I like getting a paper cheque and putting it where I want to.
How large was the cheque? The bank can place a hold on any cheque if it believes there may be a concern about unusual account activity or potential fraud. For items under $1500 usualy banks don't hold, but government cheques that are unusually large sometimes cause banks to place a hold while they verify the item. A case might be that you haven't used your account in ages (no activity) then suddenly you have this $5000 government cheque.

A soft credit check will not affect anything, lenders will not see the inquiry. In regards to Certified cheque, it's really up to you. Certified Cheques basically mean you write a cheque from your cheque book and the bank will certify that the funds are there. A money order or draft is basically the same thing except it has the bank's info on it. A bank draft or money order is usually cheaper than certification.
IX Government Items
Federal government cheques are handled differently from other cheques and are processed by the Cheque Redemption and Control Directorate (CRCD), which is operated by Public Works and Government Services Canada, in Matane, Québec. If an FI decides to place a hold on a government cheque, it generally does so because there may be a concern about unusual account activity or potential fraud.

Federal government cheque recipients that are concerned about holds on their government funds should apply for direct deposit. The federal government has implemented one of the most successful direct deposit plans in the country.
http://www.cdnpay.ca/publications/pdfs_ ... _holds.pdf
[OP]
Sr. Member
Jun 12, 2008
621 posts
64 upvotes
Ripley
Thanks. I do make a large deposit - once a year and always about the same time and about the same amount. Even if they can't see who the cheque was from they can see that. It was closer to $10,000 than $5000 and they did tell me I could have $1500. I am curious what would happen if I wanted cash for it?

I am just annoyed because I thought a bricks and mortar bank would be easier than PCF. This bank has just been one pain in the butt after another. Hubby had an account there for 10+yrs and closed it 6 yrs ago. I have had one for 14yrs. 6 months ago we got a joint account and the unrealistic holds and mistakes they have made are driving me crazy. When we opened the account they were practically throwing money at us trying to get us to take a LOC, credit card, etc (we refused) but we can't access our own money at the teller? Dumb.

The car dealer said he would take just a regular cheque so at least I don't have to go back in the bank for awhile.
Deal Addict
User avatar
Feb 2, 2004
1732 posts
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Toronto
I'm quite sure every major FI would have told you the same thing. Anything $1500 and under is guaranteed, and can be immediately cashed/deposited. Anything over, and you'll have to wait 5 biz days.

Funds on hold usually decrease when you stick and use a major FI longer, but that's just my opinion.
Paulfistinyourface wrote:This is RFD. High moral values are way down the ladder of acceptability around here. It's all about stepping on your grandmothers throat to save a buck.
Heatware
Deal Addict
Mar 6, 2005
4873 posts
430 upvotes
zeddy wrote:
Apr 14th, 2010 3:29 am
Thanks. I do make a large deposit - once a year and always about the same time and about the same amount. Even if they can't see who the cheque was from they can see that. It was closer to $10,000 than $5000 and they did tell me I could have $1500. I am curious what would happen if I wanted cash for it?
Ahh ok in terms of wanting cash, they can refuse to cash a government cheque if it's over $1500. So they were correct in allowing you $1500 on the spot. Most banks won't give out that much cash anyway to just a random person. Many branches have limits of $3000-4000 per client/day.

And lucky you with such a big cheque :D I wish I got that much.
The bank can refuse to cash a Government of Canada cheque for you if the cheque is for more than $1,500, or if the bank believes the cheque is fraudulent.

For more information on when a bank can refuse to cash a Government of Canada cheque, call FCAC.
http://www.fcac-acfc.gc.ca/eng/publicat ... ue-eng.asp
Deal Addict
Oct 9, 2005
1789 posts
151 upvotes
I deposited a $1700 GoC cheque yesterday at 5:30 pm at an RBC ATM. They would only release $1500 as stated above. It's 6:30 am the next day and the rest of the amount has been released.
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