A stale check is a check issued six months or more in the past. If the payee presents the check, the bank may refuse to pay it on the grounds that it is old. This can result in fees for the payee, as the bank will charge for processing the old check. Bank policies about old checks vary, and customers should make sure they know the procedure followed at their financial institutions.
After six months, a bank can deem a check an irregular bill of exchange and decline to honor it. The payee will need to request a new check from the party who originally wrote the draft. In other cases, the bank will go ahead and put the check through, transferring the funds to the payee's account or providing them in cash, depending on how the payee submits the check for payment.
For payees, stale checks can be a problem because a bank may accept a check for deposit into a person's bank account, submit it for payment, and then find out that the issuing bank will not accept it. It will be charged a fee for this, and will pass this on to the customer. The payee will not only be out the amount of the original check, but also the added fee for finding out it is too old to deposit. Payees can skirt this issue by entering the issuing bank and asking for the value of the stale check in cash, determining at the outset whether the bank will accept it.
The individual writing the check can also find a stale check to be a problem. Old checks tend to mess up bookkeeping. People may forget about outstanding checks and spend the money, only to get a shock when an overdraft notice arrives because the payee finally made a deposit. Out-of-sequence checks on a bank statement are a red flag that someone hasn't cashed a check, and the customer should go through her records to determine which check is involved.
Banks can provide information about their stale check policy on request. Customers should find out what will happen if they write checks and people try to cash them more than six months after they are written. Some banks will helpfully print the policy on their checks, alerting anyone who handles the check to the length of time in which it will be valid. For parties planning to deposit checks, it may be advisable to ask the teller about the fees for returned checks in the event the issuing bank returns a stale check.
