Future Dating

The term "future dating" refers to crediting a bank account to which the funds will be made available at a later date. It is done electronically, with the permission of the account holder. The account holder simply gives their account information to the depositing party, giving them the right to only deposit money and perform no other transactions. Alternatively, accounts can also be authorized to pay bills at a certain future date. This practice is most commonly used with direct deposit from the account holder's employer. It has also now become popular among government transactions as it saves both time and money for both the receiving and depositing parties.

Individual consumers and corporations use future dating to control cash flow by scheduling payments to occur when sufficient funds are present in the paying account. When a customer future-dates a payment, he or she gives instructions to his or her bank to send the payment on that future date. This is different from post-dating a check, because there is no obligation on the part of the recipient of a post-dated check to wait to cash the check until the date arrives. Therefore, an account holder who writes a post-dated check risks having the check cashed immediately, and could face cash flow problems as a result, including an account overdraft if there are insufficient funds in the account. Future dating, on the other hand, solves this problem by ensuring that the payment will be electronically transferred, or a check will be drafted, only when the future date arrives.

Future dating may be either recurrent or one-time. In recurrent future dating, a date for a recurring payment is set, and then the payment is made on that date regularly until the account holder changes the date. This is often done to manage recurring bills, such as consumer utility bills, for example. As the payment is set to recur automatically, the account holder need not take any action, unless he or she wishes to change the date of payment.

One-time future dating occurs when the account holder singles out a specific payment for future dating. It may be a one-time payment or it may be used to temporarily change the date of a recurring payment. In one-time future dating, the account holder must take action to set the future date of payment.