The Path of Your Check

The Check Clearing Process


The check receiver deposits the check with its bank. The store, bank, or Fed places a magnetic ink code for the dollar amount in the lower right-hand corner of the check and credits the store's account.

The bank sends the check to a Federal Reserve Bank to be cleared. (The bank could send the check to a private bank, called a "correspondent bank." The Federal Reserve System clears about one-third of all checks written in the country.)

The Federal Reserve Bank runs the check through its sorting machines.

After the Federal Reserve Bank processes your check, the store's bank account is credited and the check is presented back to your financial institution.

Your bank pays the Federal Reserve and debits your account.

There is a short period of time between when the store’s bank is credited for the check and when your bank is presented with the check. During this time, both financial institutions have the same funds available to them, called “float.” (Learn more about float.)

You receive a summary of the transaction in your bank statement.