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/246the Cheque and Credit Clearing Company *

*While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by Lloyds Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. Specific advice should always be sought in each instance.

Information relating to sterling cheques issued in the UK

From the 30 October 2017 a new “Next Business Day cheque clearing cycle" will be introduced for all banks in the UK. This will run alongside the existing “6 Business Days cheque clearing cycle”. The clearing cycle used will depend on which bank a cheque is deposited with, and by the method of deposit. From 30 October 2017, until the 6 Business Day clearing cycle is removed, both clearing cycles will be in operation. You should anticipate money from cheques you write leaving your account on the next Business Day; and money being cleared from cheques you deposit within 6 Business Days. You should always ensure you have sufficient funds in your account prior to issuing a cheque.

More information about how the cheque clearing cycle works across UK banks can be found on the payment scheme website managed by the Cheque and Credit Clearing Company.

These timescales are industry guidelines. Interest calculations and the availability of funds may be earlier in certain circumstances.

Cheques paid in at a branch after 17:00 on a Business Day or any day which is not a Business Day may not begin to be processed until the next Business Day. Some branches have an earlier cut-off than 17:00. A notice will be displayed in such branches which will specify the earlier cut-off time. Cheques paid in via alternate methods than a branch will have different cut-off times. Please refer to the specific T&Cs for that method of deposit for more details.

Timescales for bulk cheque schemes may be different. Please contact your relationship team for further information.

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