Legal - Cheque Clearing Process
Cheques go through a clearing process so the amount you pay in may not be available to use straight away. We meet the requirements of the 2-4-6 cheque clearance process implemented by all UK banks and building societies. The 2, 4 and 6 refer to the number of working days after a cheque has been paid into an account. Working days are Monday to Friday, except bank holidays. This is how the process works if you pay in a sterling Cheque from another bank:
- We will show the Cheque in your account on the same day that we receive it
- From the second working day after we receive it, we start paying interest on the cheque (or using it to reduce the interest you pay)
- From the fourth working day after we receive it, the funds are available for you to use but the Cheque may still need to be returned unpaid up until the sixth working day after we receive it
- From the end of the sixth working day after we receive it, if the Cheque is returned unpaid by the paying bank, we cannot take the money from your account without your consent unless you have acted fraudulently
So, for example, if you pay in a Cheque on a Monday, you will see it on your statement the same day, it counts towards interest on Wednesday, you can use the money on Friday and we cannot take the payment out of your account after the following Tuesday.
If the funds from the Cheque are not available to use we may refuse to make a payment if you do not have enough money in the account to cover it. A Cheque can be returned unpaid up until the end of the sixth working day after we receive it. If this happens, we will take the money from your account even if it puts you into Overdraft.
Banks are cutting cheque clearing times from six days to just two. It’ll take some time for all banks to make this change. Until then if you write a cheque that’s paid into another bank that’s already moved to the new clearing times, your money could leave your account quicker. We’ll let you know when we move to the faster process for cheques you pay in.