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It's my cousin's birthday. I can't think of a suitable gift. I go to the bank and get a draft (cashier's) check for $100 payable to my cousin. (It's an example scenario. No need to compare it with personal checks or with gift certificates.)

On the birthday, I give the check as a gift. My cousin puts it in a folder "to be processed on the next trip to the bank" but forgets about it. The check is never cashed.

What happens to the money? The bank doesn't even know how to contact my cousin (they just have a name). Suppose I'm still a customer of the same bank many years later. Will they contact me eventually and say "your $100 were never cashed, please come pick them up"? Will they wait 75 years and give the money to the state, as with dormant accounts whose owners vanish? Is the money a profit for the bank, until/unless cashed?

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Most likely the bank will keep it on file for a few years then turn it over to the state as "unclaimed property". I can't speak for all states though.

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  • Do you have a reference for this?
    – Marcus D
    Oct 30, 2016 at 21:38
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    @MarcusD: See sco.ca.gov/upd_faq_about_q01.html for an example. Oct 30, 2016 at 21:40
  • I was asking the poster to improve their answer with a reference, as it seems like a piece of opinion, but thx for the links @NateEldredge
    – Marcus D
    Oct 30, 2016 at 21:43
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    Not an opinion, my experience.
    – mannaggia
    Oct 31, 2016 at 3:13
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A number of years ago a cashiers check I used for an earnest money deposit on a property I was buying was un-cashed 30 days later. My Credit Union contacted me, and then I reached out to the escrow company to see what the issues was. I was glad that the Credit Union contacted me, because there were other issues with the transaction.

Talk to your financial institution, see what their policy is. They may have to follow local laws.

Even though it wouldn't help in this situation, always have your name included with an "or" on the check so if you do need to reissue a new one you can redeposit the funds.

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  • It's possible to write an "or" on a cheque? That's surprising, because it borders on becoming a bearer cheque: it can be cashed by either party. The good news though is that the one sending the cheque is implicitly also a recipient. The cheque just needs to be canceled and redeposited to the one who sent it.
    – Calaf
    Sep 21, 2022 at 15:11
  • I have always had an or on the cashiers check. If there is a glitch in the transaction I want to be able to redeposit the funds. I once had the closing company miscalculate the need for a check. It went from me having to pay about $1,000 at closing to me getting money back at closing. I was able to redeposit the check the next business day. Sep 21, 2022 at 15:30
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If the recipient never cashed the check, the money continues to be the bank's, just as if you had written s normal check that didn't get cashed the money would sit in your account.

FALSE. The money is a secured transaction (promissory note) to the bank via the requester to process a secured funded check. The bank usually has its rules amended to hold a secured check to meet State regulations. Most states have regulations regarding unclaimed secured checks which are sent to the state's department of recovery after two years if left unclaimed. The funds are then in recovery back to the requester.

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    Is this supposed to be a comment on keshlam's answer? Otherwise you should probably remove the quote and just leave your explanation on how unclaimed property is handled (with maybe some references?), although that was already provided in other answers (including the accepted one)
    – littleadv
    Sep 13, 2022 at 5:34

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