A postdated check is a check that has a date in the future for when it can be cashed. People may use post-dated checks with a variety of service providers. They’re usually not accepted by utility companies, credit card companies, retailers, or landlords/mortgage companies. One of their principal uses in modern financial transactions is with Payday loan companies, who, when releasing loan funds to customers, may require a post-dated check to repay a loan on a specified date corresponding with the person’s next paycheck.
It is very important to understand the ins and outs of these checks because in many countries post-dating is not a guarantee the check won’t be cashed sooner. Banks in the US and UK honor these checks sooner than their dates, although US banks may need to respect the date if a customer has informed the bank that he or she has written a postdated check. What this means for the person who wants to post-date the check is that they need to elicit some type of guarantee from the payee that the check won’t be deposited until the agreed upon time. If that guarantee is not trustworthy, consumers may want to consider holding the check until the actual date when it is safe to deposit it.
There are also risks in accepting a postdated check. A person could close an account, withdraw all funds, or simply not have enough money to cover the check by its specified date. Of course, by certifying that the money is presently not available to pay funds on a check, the person writing it may either be being honest or unreliable. These checks aren’t always a risky proposition and they can be an attempt to swiftly pay someone.
The contrast to a postdated check is an antedated check: a check written in the present that is dated for sometime in the past. Sometimes tenants antedate a check by a few days when they’ve mailed out a late rent payment. Anyone accepting an antedated check should verify that the date is not so far back in time that the bank won’t honor the check. Many banks will only honor checks written less than six months to a year ago. If there is concern on this point, receivers of a check could ask writers to update the date and initial the change.