A cheque is a written order from an account holder, instructing their bank to pay a specified sum of money to a named recipient. Cheques 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.

Cheques are physically transported from bank or building society branches to central clearing centres where they are processed before being exchanged with the relevant banks and building societies for payment. It is a slow and labour-intensive process but it has to be done this way because the current law requires it.                     
                           
The Cheque and Credit Clearing Company (C&CCC) is currently managing a programme to introduce a new, easier and quicker way of clearing cheques across the UK. Called the Image Clearing System, it will enable digital images of cheques to be exchanged between the banks and building societies concerned instead of moving the paper around the country. This will allow money from cheques paid in to be available for withdrawal much sooner than currently.                                            

New legislation to enable the introduction of cheque imaging was passed in 2015 - it will come into force after the Government has drafted the regulations to underpin the legislation. Timescales to introduce a UK-wide Image Clearing System that will speed up the cheque clearing process will be announced over the coming months.                                    

You should ensure that you have an account which best suits your needs. If quicker access to cheque funds is important, you should shop around for an account which offers more favourable terms. Some accounts allow early access to funds from a cheque, sometimes as early as the day you pay in the cheque.

However you should be aware that the funds aren’t definitely yours to keep until the end of the sixth working day after paying the cheque in. If you withdraw the funds and the cheque is then returned unpaid (i.e. bounces) before the end of the sixth working day, in most cases the bank will ask you to give the money back. 

Anyone who needs a quicker way to pay or receive money should use an online, mobile or telephone banking payment, which can typically be made in a few minutes.

The industry has set a maximum timescale of day four for customers to access the money after paying in a cheque, but this does not prevent banks beating this timescale with their own competitive offering. Under The Banking Conduct of Business Sourcebook (BCOBS), banks and building societies are required to provide clear details of their policies.

You should speak to your bank or building society to try to resolve your issue. If they do not resolve it, under the Banking Conduct of Business Sourcebook (BCOBS), banks and building societies are required to tell you how to make a formal complaint. Ultimately you can refer a dispute to the Financial Ombudsman Service.

The vast majority of cheques are paid and do not bounce. Only around 0.5% of all cheques are returned unpaid each day.

The typical reason for a bank to bounce a cheque is because a customer does not have enough money in their account to pay the cheque or they have used all of their overdraft facility. In addition, when a bank spots a fraudulent cheque it will bounce it. But banks also bounce cheques because: the cheques have not been signed correctly (e.g. one signature when two are required) or perhaps not signed at all; because they are out of date or post-dated; or because the amount in words differs from the amount in writing. If a cheque that you have paid in bounces, your bank might take the funds out of your account – you should be aware that this might be after you’ve withdrawn the funds (but it will be before the end of working day six after the cheque has been paid in).

No. A cheque is valid for as long as the debt between the two parties (i.e. the person writing the cheque and the person they give it to) exists. In other words, cheques don’t have an expiry date. However, it is common banking practice to reject cheques that are over six months old to protect the person who has written the cheque, in case the payment has been made another way or the cheque has been lost or stolen. This six-month timeframe is at the discretion of individual banks. It should not be assumed that cheques older than six months would automatically be rejected as the only definite way to cancel a cheque is for the person who wrote it to request that a stop be placed on it. If you have a cheque that you want to pay in that is more than six months old, your best course of action is to not pay it in and instead obtain a replacement from the person who gave it to you. Where there is a dispute, a cheque remains legally valid in order to provide proof of the existence of a debt for a period of six years, which is the Statute of Limitations.

You have a legal right to request your bank to stop payment of a cheque before it makes its decision whether or not to pay it (Bills of Exchange Act 1882) but there are limited circumstances in which this is permissible. You should talk to your bank first. Your bank may charge you for stopping a cheque.

If you've received a cheque and you want to know as soon as possible whether it will be paid, you can ask your bank to present that cheque ‘specially’. The bank then sends the cheque by first-class post directly to the paying bank, contacting them by phone on the following weekday to confirm whether it will be paid. You may not receive the funds any sooner, but you will have certainty that the cheque will be paid, or not, more quickly than the normal clearing timescales. If your bank offers this service (not all banks do), there is normally a charge.

When cheque clearing has fully migrated from paper to image, the right for a cheque to be specially presented will remain. In a 2-4-6 world, with its lengthy clearing timescales and certainty of fate not happening until the end of the process, a customer’s reasons for using the special presentation service are clear.   However, with the advent of cheque imaging, the quicker clearing timescale provides certainty of fate at the end of the next weekday after paying a cheque into a bank account, so customers are much less likely to need a cheque to be specially presented. As a result we expect the volume of cheques being specially presented to be significantly reduced.

Yes, If you've received a cheque and you want to know as soon as possible whether it will be paid, you can ask your bank to present that cheque ‘specially’. The bank then sends the cheque by first-class post directly to the paying bank, contacting them by phone on the following weekday to confirm whether it will be paid. You may not receive the funds any sooner, but you will have certainty that the cheque will be paid, or not, more quickly than the normal clearing timescales. If your bank offers this service (not all banks do), there is normally a charge.

When cheque clearing has fully migrated from paper to image, the right for a cheque to be specially presented will remain. In a 2-4-6 world, with its lengthy clearing timescales and certainty of fate not happening until the end of the process, a customer’s reasons for using the special presentation service are clear. However, with the advent of cheque imaging, the quicker clearing timescale provides certainty of fate at the end of the next weekday after paying a cheque into a bank account, so customers are much less likely to need a cheque to be specially presented. As a result we expect the volume of cheques being specially presented to be significantly reduced.

No. Most cheques are crossed 'A/C Payee'. The Cheques Act 1992 and Section 81 of the Bills of Exchange Act 1882 give statutory power to the ‘A/C Payee’ crossing when it is used. The rules mean that a cheque which bears the ‘A/C Payee’ crossing can only be paid into an account in the name of the recipient exactly as it appears on the cheque. Similarly, a cheque payable to two people (normally known as a joint account) can only be paid into an account in the name of the two people exactly as they appear on the cheque. The crossing cannot be deleted, nor can the cheque be transferred over to a third party.

If you and the shop both hold accounts at the same bank branch the cheque would not have to pass through the central cheque clearing and the funds could leave your account within two days. It is always important that you make sure you have sufficient funds in your account before writing a cheque.

This is a decision that individual shops have taken. By 2009 most supermarkets and petrol stations had stopped accepting cheques. Many high street shops have also followed suit. Some have said it is driven by cost, some by fraud concerns and others by a desire to reduce queuing time for their customers. However, none of them would be making this decision if they felt they would lose customers, so the key factor must be that so few customers are using cheques in shops.

First, check with your bank to ensure the original cheque that you issued has not already been paid. If you're happy that the cheque has not already been paid you should place a stop on the original cheque (there may be a cost for this) and, if you wish, issue another cheque which the person you give it to can then pay in. Alternatively you may prefer to make the payment by other means.

This situation may arise if you pay the cash into your account via a bank other than your own. As your cash deposit is typically accompanied by a paying-in slip, this piece of paper has to go through the credit clearing, which means the deposit may take two working days to reach your account. Cash paid into your own bank will be credited to your account on the same working day.