Here we study, what is a stop payment? As well as How it works and cost? Where we will analyze the reasons why a stop payment might be needed? And for how long it can last. So, let us first understand the meaning of stop payment.
What is a stop payment?
A stop payment basically is a request made out to the bank or any institution that has issued a check or payment to cancel the payment, which has not been processed. It can be on a check, where you ask or call your bank to cancel a check before its processing. the account holder himself issues the order for stop payment and can only be fulfilled if the check or payment has not already been processed further.
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So, stop payment is a request or an order to hold back the payment of a check.
Reasons to stop payment on a check:
There exist many reasons in which an individual or a bank holder may request for a stop payment or say some reasons to stop payment on a check which are as follows:
- Inappropriate info on a check
- A check mailed to the incorrect address
- A lost or stolen check
- Inadequate funds in a bank account
- An argument or a dispute over a purchase or services rendered
How does a stop payment work?
Bank usually follows stop payment rules regulations in which you need to provide certain information to the bank in regard to the specific check you wrote to stop the payment. So, by following steps you can stop the payment as follows:
- Call your bank
- Provide the required details of your check to the bank as check number, amount, payee, and the date
- Follow up the process in writing to provide a stop payment letter to the bank.
- Paycheck stop payment fee
After the process has been followed up, the bank flags the check and will not allow the payment of the check.
Example: If you have lost a check amounting to $ 56,000 then you need to call the bank and tell them to stop payment on check number 09890 for $ 56,000 written to GHI Company on November, 30. And, if the bank receives this check, then this will not be processed and cleared.
Cost to stop payment on a check
Banks usually charge a stop payment on check fee to flag your check and to hold the check bank for not clearing it. Where, some banks do waive off the fees with certain checking accounts, or also charge a lea amount of a stop payment fees. Though, a fee of $30 or more charges, but depends upon the banks.
Here, we mention some of the major banks as well as some of the financial institutions with their stop payment on check fees as well as discounts offered.
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| Bank | Stop Payment Fee | Waivers and Discounts of Fee |
|---|---|---|
| Capital One | $ 35.00 | $ 25.00 for Capital One 360 Checking |
| Chase | $ 30.00 | - |
| Bank of America | $ 30.00 | Waived for Interest Checking |
| Citibank | $ 30.00 | Waived for Citigold®, Citi Priority, or Private Bank clients |
| Wells Fargo | 31.00 | - |
| Fifth Third Bank | $ 33.00 | Waived for Enhanced and Preferred Checking |
| Ally Bank | $ 15.00 | - |
| HSBC | $ 30.00 | Waived for Premier Checking |
| PNC | $ 33.00 | Waived for Performance Select Checking |
| TD Bank | $ 30.00 | Waived for Premier and Relationship Checking |
Note: If you cancel or stop payment on multiple checks at once then it costs you cheaper.
Stop payment on debit card
The process to stop payment on debit card is difficult as it is processed immediately compared to credit cards. So, you need to inform and call the bank for doing so. However, the bank will stop payments done on your debit card.
How long does stop payment last?
In the case of a personal check, the stop payment lasts about six months. After a period of six months, you can request another stop payment, but usually, after six months the checks become “stale dated” and cannot be cashed.
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How does a stop payment work?
Bank usually follows stop payment rules regulations in which you need to provide certain information to the bank in regard to the specific check you wrote to stop the payment. So, by following steps you can stop the payment as follows:
- Call your bank
- Provide the required details of your check to the bank as check number, amount, payee, and the date
- Follow up the process in writing to provide a stop payment letter to the bank.
- Pay check stop payment fee
After the process has been followed up, the bank flags the check and will not allow the payment of the check.
What is a stop payment order?
A stop payment is a request or an order to hold back the payment of a check. It can be on a check, where you ask or call your bank to cancel a check before its processing. the account holder himself issues the order for stop payment and can only be fulfilled if the check or payment has not already been processed further.
How long does stop payment last?
In the case of a personal check, the stop payment lasts about six months. After a period of six months, you can request another stop payment, but usually, after six months the checks become “stale dated” and cannot be cashed.
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What happens if a stop payment check is cashed?
In case you are informed successfully to stop payment on check and the bank fails to do so then the bank will be liable to pay for the cashed check.
What Is A Stop Payment On Bank Account?
A stop payment order is a request to cancel a payment before it’s been processed. Types of payments you might cancel include personal checks and ACH payments, like recurring monthly bill payments.
What Are The Consequences Of A Stop Payment?
Generally, banks honor a stop payment request for a check drawn on your account. If you stop payment properly and the bank cashes the check, the bank may be liable for the cashed check. you fail to provide sufficient notice to implement the stop payment order.
Conclusion:
Thus, by now you know, what is a stop payment? As well as How it works and cost? Where we will analyze the reasons why a stop payment might be needed? And for how long it can last. As, A stop payment basically is a request made out to the bank or any institution that has issued a check or payment to cancel the payment, which has not been processed. It can be on a check, where you ask or call your bank to cancel a check before its processing. the account holder himself issues the order for stop payment and can only be fulfilled if the check or payment has not already been processed further. So, stop payment is a request or an order to hold back the payment of a check. Thus, we successfully explained what is a stop payment?