Starting Thursday, a federal law called Check Clearing for the 21st Century Act or Check 21, will allow banks to process checks without any lag time.
Check 21 was originally proposed after Sept. 11, 2001, when physical copies of checks could not be delivered to banks because air traffic was grounded.
Similar to an airline using an e-ticket as opposed to the standard paper ticket for your receipt, your checking account will now function the same way. Instead of relying on the paper receipt of a check, a bank will now be allowed to convert the check into a digital image and process it electronically though its system.
Once the new systems are in place, checks that used to take a day or more to clear could go through in less than 24 hours. Here are the basics on Check 21 and how you can avoid getting burned by the bounce:
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