Cheque & Credit Clearing

What are cheques?

Cheques are written orders from account holders instructing their banks to pay specified sums of money to named beneficiaries. They are not legal tender but are legal documents and their use is governed by the Bills of Exchange Act 1882, and the Cheques Acts of 1957 and 1992.

What are Bankers' Drafts?

Bankers' drafts are cheques drawn directly on the account of a bank rather than the account of a customer. They provide added assurance as the bankers’ drafts are unlikely to be returned unpaid due to lack of funds. However, it is important to note that they do not provide a guarantee against fraudulent use. For example, they may be lost or stolen and then used fraudulently.

Cheque Clearing

There is often confusion about how the clearing system works and the time it takes for a cheque to clear. In November 2007 the 2-4-6 changes to the cheque clearing system came into force, giving customers increased clarity and certainty.

The clearing does not operate on Saturdays, Sundays and Bank Holidays — as settlement across Bank of England accounts can only take place Monday to Friday.

A full explanation of the cheque clearing cycle can be found on the Cheque and Credit Clearing Company's website www.chequeandcredit.co.uk

Further Information

Cheque Printer Accreditation Scheme (CPAS)

2-4-6 changes to cheque clearing