A question for you bankers

What are cheques I agree crazy. Sorry don't have an answer, well none that would be allowed on CT

You need to look at the cheque clearing cycle on your bank details Kennine. Mine says says seven working days for it to clear safely, even after five days it can be recalled but it starts earning interest on the third day. It also depends on what time of day you paid it in. On line transfers are a lot quicker.

No pun intended but it's all about money!  Whilst your money is in a state of financial limbo the banks are coining interest on it?

Always wanted to know the answer myself.  Quickest way is to use electronic transfers.  I think BACS is free as it takes 3 days; CHAPS is roughly £25.00 to £36.00 which is same day up to 3:30pm, and there is another one, but I can't remember it

Here is a typical clearing cycle between two major high street banks for a cheque:-

Day 1. Paid in at bank 'A' and sent to clearing dept that night.

Day 2 received, sorted and sent to bank 'B' HO clearing dept.

Night 2  received by Bank 'B' , sorted and despatched to relevant branch.

Day 3  received at branch and 'paid' or returned 'unpaid' by post to original bank and branch.

It is also allowable for bank B to return a cheque unpaid up till 12 o/c on day 4, provided they phone bank A to warn that it is coming back. That with overnight post would make it day 5 before the cheque gets back to the original bank where it was paid in.

Hope that goes some way to explaining it.

Late returns. Remember them well. 

Hi Tombar. In todays electronic world and internet banking most payments are 'same day value'. Chaps only exists now for Solicitors etc because of the sums involved. Anything over £20,000 is normally reported to the financial authorities.

Our bank, Halifax quote 5 working days for cheques to clear.

These days I believe Standing Orders and other electronic payments, go by "Faster Payments", most arriving within 2 hours, many almost instantly, though they are allowed to take until the end of the next working day.

Thank you for your explanations.  The reason for my question is that we never use cheques , we do internet banking. The other day we received two cheques from a building society and paid them into our bank. 

When checking our account after a few days we see the amount being credited to our account but it is not available yet.   I am sure that after another few days the deposit will be available  BUT I am of the impression that the bank is delaying payment longer than necessary for some unknown reason.

K

I thought a few years ago the banks introduced a systems where by cheques cleared a lot quicker. Mind you its not the only thing that is strange about banks. I get my laughable amount of interest on my ISA paid monthly. Now you would think that as that is an automatic process that it wouldn't matter what day the 1st of the month fell. For some strange reason interest is always late when the due date is a Saturday or a Sunday!!!

David