Cheques may not be as popular as they once were, but they’re still widely used. Find out how they work, how long it takes for a cheque to clear and why it still takes so long.
Cheques are still used, so it’s important to know how they work - even if you only use them to pay a newsagent for delivering your daily papers or enclose them with a birthday card. You may not automatically get a cheque book from your bank anymore, but you can request one if needed. You can also pay in cheques at all banks and building societies. Discover how cheques work, how long it takes to access the money and the best alternatives.
Paying by cheque is on the decline. Cheques take a long time to clear, so it’s much quicker to transfer money using online banking or even deposit it directly into an account.
You can still pay by cheque in a few places these days, but rarely on the high street.
But while it might’ve been a while since you used one, cheques are still a valid method of payment.
If you’ve ever wondered how long a cheque takes to clear, you’re not alone. You can’t access the funds until several days after banking a cheque. Here’s a day-by-day summary of what happens during the traditional cheque-clearing process:
You bank the cheque you’ve been given. The details are registered with both banks – yours and the bank the funds are coming from
You can usually see the funds payable to you on your bank statement at this point. It will be shown as a pending amount, but you can’t access the money yet.
All cheques are rounded up at the end of each working day and sent to a clearing centre.
The cheque arrives at the clearing centre 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 the cheque is from
It goes to an exchange centre. The bank that the money is coming from picks it up from here.
Most banks begin to pay interest on your paid-in funds within two working days
The transaction shows on the statement of the person making the payment
The bank could still reject the cheque due to a technical error at this stage, which would lead to its return
You can withdraw the funds
The cheque could still bounce up until the sixth day. If this happens, you may have to pay back the money.
How long does a cheque take to clear? The Cheque and Credit Clearing Company, which is responsible for clearing cheques, relies on the 2-4-6 system:
Two days until the money’s earning interest
Four days until you can withdraw
Six days until you can be sure the cheque funds have been applied to your account.
Cheques technically don’t have expiry dates, but most banks refuse them after 6 months.
If it's been longer than that, some banks might take them but the simplest thing to do is ask for a new cheque or for the money to be transferred another way.
If there's a dispute about the amount, you can use them as evidence of a debt owed to you for as long as six years - after which courts will no longer accept them.
Paying by cheque is faster than it used to be. The main reason the cheque clearing process took so long traditionally was that cheques are physical pieces of paper.
But many UK banks and building societies now use cheque imaging, which speeds up the process. It is no longer necessary to move pieces of paper.
It also means that customers can – in many cases – bank cheques by uploading a photo of the cheque via their bank’s mobile app.
Cheques can now clear by 23:59 on the day after you bank them, and sometimes even more quickly (although it’ll take longer on bank holidays).
If you’re unsure how to cash a cheque, you’ll be pleased to hear you have options.
When you’re given a cheque as payment, you may have to visit your local bank to pay it in. But, depending on how tech-savvy you are and who you bank with, you might not need to make the trip.
With the introduction of new technology, many people choose to pay in cheques by uploading photos of them using a smartphone or tablet and their bank’s app.
Many banks now also have paying-in machines that electronically read the data on your cheque and hold it for processing using cheque imaging. So, even if you visit your bank to pay it in, it should clear more quickly with this option.
You don’t have to have a bank account to cash a cheque: a cheque cashing service can pay the cheque out in cash.
Most of these services charge a fee - sometimes it’s a flat fee if the cheque is below a certain amount, or it can be a percentage of the amount cashed if it is above a given threshold. It’s worth checking how much you’ll have to pay to cash the cheque before you go ahead.
Yes. The most common alternative is to move money using a bank transfer, and you can move money between people and companies this way.
You can easily set up bank transfers on a mobile phone or computer using online banking or Paym. You just need the recipient's mobile number to send money through Paym. Or you need the payee's name, sort code and account number to use online banking.
Payments usually arrive in less than two hours and can be spent immediately.
Compare bank accounts with online banking to find one with all the features you need.
Yes, instead of posting a cheque, you can use an international money transfer. This lets you send money to a bank account held in another country, either in your name or someone else's.