How long does it take a cheque to clear?

Personal cheques aren’t popular these days, but they still have their uses. Ever wondered how long it takes a cheque to clear? We take a look.

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Cheques are not as popular as they once were, but they can still be useful. If you have ever wondered how long it takes a cheque to clear? This article gives you the answer.

How long does it take for a cheque to clear?

It takes one working day after you pay in the cheque for it to clear. However, this can vary depending on the day and time you pay it in.

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If you pay in a cheque on a weekday before your bank’s deadline (usually around 3:30pm to 4pm), the cheque will be cleared before midnight on the following day.

Cheques paid in on a Saturday before the bank’s deadline, the cheque will be cleared before midnight on the following Monday.

If you pay in a cheque on any day after your bank’s deadline, you will have to wait an extra business day.

[top_pitch]

The cheque clearing process used to take longer, didn’t it?

Yes, it did. But from late October 2017, UK banks started to use a process called cheque imaging.

The new system allows banks to send and receive secure, electronic images of cheques. It’s a much quicker process than the old method. This involved the physical transfer of paper cheques from one bank to another via a clearing centre.

So, that’s how the amount of time it takes for a cheque to clear has been reduced from four to six days to a single working day.

Why was the process changed?

There are now a number of different ways that UK bank account holders can transfer funds. All of these methods take much less time than the old cheque clearing system. They include the following:

  • Bankers’ Automated Clearing System (BACS), which takes three days
  • Clearing House Automated Payments System (CHAPS), which completes on the same day
  • Faster payments, which can be completed in as little as two hours

Banking has changed and evolved in the digital age. It was essential that the old cheque clearing system was modernised too.

The new system doesn’t just reduce the cheque clearance time. It also allows you to pay in a cheque by taking a picture and sending it to your bank using their mobile banking app.

So provided your bank has the system in place, it is possible to deposit a cheque without setting foot in a bank.

[middle_pitch]

How does the cheque clearing process work?

The bank sends the digital image of the cheque to the Image Clearing System (ICS) which is managed by the Cheque and Credit Clearing Company (C&CCC).

The ICS sorts and verifies the cheque. It then sends it to the bank of the person that wrote the cheque for further verification. Once approved, the funds are transferred the next working day.

What if I forget to pay in a cheque?

It happens to the best of us. Life gets in the way, time passes, and then you suddenly remember that cheque you got for your birthday.

But don’t worry, personal cheques are valid for six months from the issue date. However, if you discover a cheque a few months down the line, it might be a good idea to inform the person who wrote it before you pay it into your account. This will ensure your cheque is not rejected due to insufficient funds.

Take home

It takes much less time for a cheque to clear than it used to. In fact, the cheque clearing system has been completely modernised in line with the digital banking processes used today.

If you’re interested in finding out how you can pay in cheques using a banking app, speak to your bank. You will need a smartphone and access to their banking app.

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