Regulation CC, the Federal Reserve rule that sets how long a bank may wait before releasing deposited funds, gives branches in seven U.S. places one more business day than the standard schedule allows. The extra day is a permission rather than a requirement, and it reaches only some checks. The paragraph that grants it is short, which makes its scope easy to state exactly.
Section 229.12(e) names seven places, not three
The extension sits in paragraph (e) of 12 CFR 229.12, the availability schedule. Its heading reads “Extension of schedule for certain deposits in Alaska, Hawaii, Puerto Rico, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands.” The operative sentence says the depositary bank “may extend the time periods set forth in this section by one business day.”
Alaska, Hawaii and Puerto Rico are the three places most often named when the rule is summarized, but the regulation lists four more: American Samoa, the Commonwealth of the Northern Mariana Islands, Guam and the U.S. Virgin Islands. A summary that stops at three leaves out territories whose branches are covered by the same sentence.
The wording is permissive. A bank “may” extend, so a branch in any of the seven places can choose to follow the ordinary schedule instead. Nothing in paragraph (e) obliges a bank to use the added day, and nothing in it guarantees that a given branch does.
The extra day depends on where the deposit is made and where the check is drawn
Two conditions must both be met, and the text numbers them. First, the check must be “deposited in an account at a branch of a depositary bank if the branch is located in” one of the seven listed places. The test is the location of the branch where the deposit lands, not the headquarters of the bank. A bank based elsewhere that runs a branch in Guam falls inside the rule for deposits made at that Guam branch.
Second, the deposit must be made “by a check drawn on or payable at or through a paying bank not located in the same state as the depositary bank.” A check written on another bank in the same state does not qualify. The definitions in 12 CFR 229.2 explain the vocabulary: the depositary bank is “the first bank to which a check is transferred,” and the paying bank is the institution responsible for payment or collection of the check. The extra day therefore attaches to out-of-state checks.
The lead sentence of paragraph (e) also carves out a category. The extension applies to “any deposit, other than a deposit described in § 229.10.” That exclusion matters more than it first appears.
Deposits under Section 229.10 never get the extra day
Section 229.10, the next-day availability rule, covers the deposits that Regulation CC treats as nearly immediate. According to the eCFR text of 229.10, cash deposited in person to an employee of the depositary bank must be available the next business day. So must funds received by electronic payment, which the rule makes available “not later than the business day after the banking day on which the bank received the electronic payment.”
Several check types sit in the same protected group when conditions are met: Treasury checks held by the payee, U.S. Postal Service money orders deposited in person by the payee, Federal Reserve and Federal Home Loan Bank checks deposited in person by the payee, state and local government checks deposited in person in the same state, and cashier’s, certified or teller’s checks deposited in person by the payee. Checks drawn on the same bank as the account also qualify, as do aggregate deposits of up to $275 in other checks on a single banking day.
Because paragraph (e) excludes “a deposit described in § 229.10,” none of those deposits may be stretched by the territorial day. The extra day touches the checks that fall into the ordinary two-day and five-day schedules, and nothing in the next-day tier.
How the day is added to the second- and fifth-business-day schedules
Paragraph (b) of 229.12 requires local checks and certain other checks to be available “not later than the second business day following the banking day on which funds are deposited.” Paragraph (c) sets “not later than the fifth business day” for nonlocal checks. Both paragraphs open with the phrase “Except as provided in paragraphs (d), (e), and (f),” which is the cross-reference that brings the territorial extension into play.
Applying paragraph (e) to those two schedules produces a third business day where the standard is two, and a sixth business day where the standard is five. Those totals are arithmetic on the quoted text; the regulation itself speaks only of extending “by one business day.” A separate paragraph, (d), allows a bank to extend by one business day the time before deposited check funds are available for withdrawal by cash or similar means. That is a distinct provision with its own trigger, and it is not specific to any territory.
Exception holds under Section 229.13 run on their own track
The territorial day is not an exception hold. Exceptions live in 12 CFR 229.13, and the current eCFR text contains no reference to Alaska, Hawaii, Puerto Rico, Guam or the Virgin Islands at all. The exceptions cover situations such as new accounts, large deposits, redeposited checks, repeated overdrafts, reasonable cause to doubt collectibility and emergency conditions.
The large-deposit exception shows the scale. Paragraph (b) states that sections 229.10(c) and 229.12 “do not apply to the aggregate amount of deposits by one or more checks to the extent that the aggregate amount is in excess of $6,725 on any one banking day.” Paragraph (h)(4) defines the “reasonable period” for an exception hold as “an extension of up to one business day for checks described in § 229.10(c)(1)(vi), five business days for checks described in § 229.12(b)(1) through (4), and six business days for checks described in § 229.12(c)(1) and (2) or § 229.12(f).”
Those one, five and six day figures belong to exception holds. They are sometimes confused with the territorial day because the numbers overlap, but the two rules answer different questions. Paragraph (e) of 229.12 lengthens the baseline schedule for qualifying branches. Section 229.13 lets a bank hold beyond the baseline for a specific reason, and it does not mention any place in its text.
Business days decide how the count runs
Every period above is counted in business days, and the definitions in 229.2 fix what that means. A business day excludes weekends and the listed federal holidays: January 1, July 4, November 11, December 25, the third Mondays in January and February, the last Monday in May, the first Monday in September and the second Monday in October. A banking day is the part of a business day on which an office of the bank is open to the public for substantially all of its banking functions.
The Federal Reserve Board issues the rule under a 1987 statute
The Federal Reserve Board issues Regulation CC as 12 CFR part 229, and the eCFR shows sections 229.10, 229.12 and 229.13 as last amended on May 20, 2024, at 89 FR 43739. The Board’s own Regulation CC overview traces the rule to the Expedited Funds Availability Act, which Congress enacted in 1987 and which, in the Board’s words, “establishes maximum permissible hold periods for checks and other deposits.” The seven-place extension in 229.12(e) is one of the adjustments inside those maximums.
A hold that outlasts the schedule needs a paper trail
Paragraph (e) of 12 CFR 229.12 lets a branch in Alaska, Hawaii, Puerto Rico or the other listed places add one business day to the availability schedule for an out-of-state check. When the date funds actually clear differs from the date a bank’s notice promised, the unfinished job is documenting the deposit, the hold and the bank’s explanation.
The Bank Account & Debt Protection Kit includes a protected-funds and dispute log and a frozen-account response, which give a household a structured place to record account problems and the steps taken to dispute them.
Open the dispute log before a held deposit turns into a bank argument →
This piece was drafted with AI assistance; the funds-availability rules and figures were checked against the eCFR text of 12 CFR 229.2, 229.10, 229.12 and 229.13 and the Federal Reserve Board’s Regulation CC page.
