how uncollected funds work
uncollected funds are derived from deposits that need to be cleared by the depositor s bank before they re released for use the bank must verify that the deposited funds have been received from the bank that issued the check to the payee until then the bank refers to the funds as uncollected funds coded as ucf or uf for short and deposits appear as pending a check for a large amount that is deposited to an account is subject to a hold on most of the amount a portion typically is made available immediately to the depositor as long as the customer is in good standing with the bank a check written against an account with uncollected funds that bounces normally results in an uncollected funds charge this charge is also called a ucf fee and it is usually the same as the bank s non sufficient funds nsf fee as of 2023 some banks charged nsf and ucf fees that ranged from 30 to 40 1 however a growing number of banks have decided to stop charging nsf fees 2no uncollected funds charges are incurred if the available checking account balance can cover checks written against it benefits of uncollected fundsalthough there are numerous complaints about uncollected funds they do protect banks and their customers from certain types of fraud without uncollected funds it would be possible for someone to write a bad check on one bank account deposit it in another and then withdraw supposedly available cash this scheme is so easy and obvious that normally law abiding people in need of money perhaps those facing bankruptcy might be tempted by it even worse criminals could force innocent people into such schemes and then make them turn over the money uncollected funds are a way for a bank to tell customers that it received a check deposit but the funds are not yet available customers can consider the uncollected funds phase a short waiting period that supports good money management and helps them avoid unnecessary overdrafts for example a customer might deposit a check by sending it to the bank through the mail when the bank gets the check it will designate a portion of it as uncollected funds 