Can you still pay by cheque?

Yes, technically you can still pay by cheque. However, they are rarely accepted as payment on the high street and could soon be a thing of the past.

With the introduction of electronic transfers and instant payments the simple piece of paper that takes days to clear is becoming less attractive.

For now though at least cheques are still used as a method of payment, whether in business transfers, a birthday present from your Gran, or for other reasons.

How do you pay in a cheque?

Did you know

By October 2017, you will be able to pay a cheque into all banks by simply taking a photo of it and uploading it to an app.

Source: Barclays - Future of Cheques

When you are given a cheque as payment you may have to visit your local bank to pay it in. With the introduction of new technology everyone should soon be able to pay in a cheque from a smart device.

Many banks now have paying-in machines that electronically read the data of your cheque and hold it for processing. Otherwise, the more old-fashioned visit to the bank teller is still an option.

What happens to the cheque?

Day one

  • The cheque details are registered with both your bank and the bank it has come from

  • You can usually see the funds payable to you as an entry on your statement

  • All cheques are rounded up at the end of each working day and sent to a clearing centre

Day two

  • The cheque arrives at the clearing centre and waits to be sorted

  • The sort code, account number, serial number, and amount are taken from the cheque

  • These details are sent electronically to the bank on which the cheque is from

  • It goes to an exchange centre where the bank the money is coming from picks it up

Day three

  • Most banks will begin to pay interest on your paid-in funds within two working days

  • The money taken from the account that is paying shows as an entry on a statement

  • It could still bounce, or have a technical error that would require it to be returned

Day four

  • You can withdraw the funds

  • The cheque could still bounce up until the 6th day

What is the 2-4-6 system?

The 2-4-6 is a clearing system brought in by the Cheque and Credit Clearing Company who carry out cheque clearing.

2-4-6 indicates the two days until the money is earning interest, the 4 days until you can withdraw, and the 6 days until you can be sure that the cheque funds have been applied to your account.

Why does it take so long?

The main reason that cheque clearing still takes up to 6 days upon first paying in the money is that cheques are physical pieces of paper.

Unlike money that can be moved electronically, cheques must be actually handled - picked up, delivered, received, and manually checked.

Because they are pieces of paper that they cannot be processed instantly - instead they require this lengthy system of checking, verifying, and moving around the country.

Of course there is the argument among cynics that the only reason cheques take so long to clear is because of the interest banks earn while thousands of cheques hang in limbo every day. But the 2-4-6 system does at least stop this a little, by guaranteeing you start earning interest on your paid-in money 2 days after depositing.

Can you check how long it will take to clear?

Yes, if you want to know exactly how long your cheque will take to clear after any given paying-in date, you can use this Cheque Checker to find out when you can expect the money to be yours.

Simply enter the date you paid the cheque in, the kind of account you paid it into, and you'll be given an exact timescale for interest earned, withdrawals allowed, and final clearance.