We are trying to determine the number of days to hold funds on a new account. We currently disclose the maximum allowed, 9 business days. (But usually place 4 day holds)

What are other banks doing for new account holds? How long do you hold funds on new accounts?

We would like to change it to 4 days but that would limit the bank in case we really need to hold for the 9 days allowed.

We use a 7 day hold for the first 30-days the account is opened. Seems to work well for us - no issues to report of note.

I was thinking about suggesting a 5 day hold to management.

We haven't had any problems but not sure if 5 days will always be enough even though processing time is faster nowadays.

I tend to lean towards the maximum hold allowed for new accounts. Although the check might "clear" in just a couple of days, the check could be returned later for a number of reasons (like endorsement issues or forgery).
Allowing the check to be held a few days after clearing could be a benefit by allowing the item to be reviewed by the paying bank or the maker of the item.

These longer holds may provide a false sense of security since in most states an item can be returned without entry up to three years after it is deposited. Better to make sure of the endorsements at the time of account opening or refuse to accept the check for deposit.

It still amazes me that any legitimate new customer would be moving all of their money into a new account via check and expect immediate availability. Reg CC and holds have been around for many years now and aren't a new concept to most people.

If someone did for some reason try to move everything in a check, it would likely be a cashier's check. I suspect a good customer could get a contact at their prior bank in a New York minute that could confirm the check for the new bank. If they needed immediate availability, they could wire the money.

Logic just leans toward verifying payee(s)/endorser(s), placing max holds and establishing clear procedures for overriding the established new account check hold process.

The 9 day "maximum" only applies to the amount in excess of $5,000 for what the model paragraph generally describes as next day availability items. The "maximum" on all other items is essentially up to your bank and can exceed 9 days.