Uncleared Effects Details

Uncleared effects can take several days to process fully. When you deposit a large sum of money or a check into an account, your account will often show the funds as "available." When you scroll through the bank statement, however, it may list this transaction as pending. This is because the bank is waiting on approval from the sender's account. This can also be the case with other types of payment transactions.

The sender's bank may not clear an uncleared effect because there was an error in the check (the person depositing the check didn't validate it correctly), or because the sender did not have enough money in their account to write the check in the first place. When this happens, it is called a bounced check. When a check bounces, the sender's bank charges a fee to the person who wrote the check, and the person who deposited the check may also face a fee from their account. In addition to fees incurred by attempting to deposit a check that never cleared the sender's bank, you also risk over-drafting your own account. Overdrawing your account means withdrawing more money than is in the account. This pushes the balance into the negative. Over-drafted accounts also incur fees and interest from your bank.

Because of this, uncleared effects are a bit of a nuisance. However, it is a necessary nuisance. The bank needs to be able to prove that there are enough funds in a person's account to cover whatever transaction is being made. They don't operate on assumptions. If it's a particularly large check, they may even look into the identity of the person who wrote the check to make sure there isn't any fraudulent activity happening. So those 48 hours it takes for the bank to update your balance is worth it in the long run.

Example of Uncleared Effects

Sara received several checks in the mail for her birthday. The amount of the checks totaled $200.00. Sara made a trip to her bank and deposited the funds on a Monday. Sara's bank account had $400.00 in her account at the time of her deposit.

On Wednesday, her bank accepted the checks, and her account showed a total of $600.00. However, only her bank had accepted the funds at this time, not received them. The senders' banks had not yet had a chance to transfer funds from the sender's account to Sara's. Sara was an experienced account manager and knew to account for this time gap in her spending. Therefore, Sara waited until the following Monday to access the extra $200.00 in her account. When both banks had approved the transaction, the $200.00 deposit into Sara's account moved out of its "Pending" status.

Uncleared Effect vs. Outstanding Check

Whereas an uncleared effect may be an outstanding transaction (a transaction the bank hasn't processed yet), an outstanding check means something entirely different. An outstanding check is a check the recipient hasn't deposited yet. There is no transaction to process.