Cheques will soon clear by the following weekday, down from the current six weekday waiting time.
At the moment, after you pay in a cheque, it takes up to two weekdays (Monday to Friday, excluding bank holidays) before you earn interest, four weekdays before you can withdraw the money, and six weekdays before you can be absolutely certain that it won’t be returned unpaid.
Under the new system, you will be able to withdraw the funds - and be certain that the cheque won’t be returned unpaid - by 23.59 on the next weekday after you have paid-in a cheque. However, this is a maximum timeframe, and many banks and building societies are likely to allow customers to access their funds earlier than this.
The Cheque and Credit Clearing Company - the organisation that manages the cheque clearing system - says the move will speed up cheque processing significantly for customers across the UK.
It says that introduction of the new process will also mean that when a cheque is paid in, not only will the recipient receive the money in their account more quickly, the money will leave the account of the person or business that wrote the cheque to the faster timescale too.
Banks and building societies will offer this faster system in a phased approach from 30 October 2017, with all providers on board by the end of 2018. The Cheque and Credit Clearing Company says it’s not been told which banks and building societies will be first to offer the new scheme.
Cheque imaging still on the table
When the new system comes into force, customers can continue to write cheques as they do today, and give or post them to recipients in exactly the same way as they always have. Cheque recipients will also still be able to pay in cheques in the normal variety of ways, such as at a bank or building society, by post or at an ATM.
However, some banks and building societies may also offer their customers the additional option of paying-in an image of the cheque - by using a secure mobile banking app on their smartphone or tablet - rather than having to go to a bank to pay it in – although ultimately it will be up to providers as to whether they offer this.
James Radford, chief executive officer of the Cheque and Credit Clearing Company, says: “These changes will put cheques firmly in the 21st century, delivering real and important benefits for the many individuals, charities and businesses that regularly use cheques.
“Not only will cheques clear faster but banks and building societies may offer their customers the option of paying in an image of a cheque rather than the paper cheque itself.“