The cheque clearing process

All cheques written and received by you go through the clearing cycle, a system used by the main British Banks to transfer money between accounts.

The clearing cycle used by the main banks changed in November 2007 and is now often referred to as the ‘2-4-6’ process (or ‘2-6-6’ for deposit accounts) as it sets a maximum time limit of two, four or six working days for each stage of the process after paying in a cheque.

This is how it works –

If you pay a cheque in on a Monday morning:

  • You start to earn interest on it from Wednesday at the latest or it starts to reduce the interest charged on an overdraft (+2 working days). Please note that the Shariah accounts are excluded, as no interest is payable.
  • You can use the money, for example, withdraw cash or make payments, by Friday (+4 working days) – although the cheque could still be returned unpaid. Funds will normally be available through all channels such as ATMs, Internet and debit cards (sixth working day for savings accounts).
  • By the end of the following Tuesday (+6 working days), you can be certain that, even if the cheque is later returned unpaid, the funds will not be debited to your account without your agreement (unless you are a knowing party to fraud).

This does mean that a cheque can still be taken from your account for up to six days after you pay it in even if you have already spent it.

For our purposes, a working day lasts from 9.00am to 5.00pm, Monday to Friday, excluding Bank Holidays. Cheques or cash paid in after 5.00pm (sometimes after 3.30pm) won’t be processed until the next working day.

If you have any further questions about the clearing cycle, please contact our business management team or your local branch.

More information on this initiative, and how it applies across the UK Banking Industry, is available at www.chequeandcredit.co.uk/246

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