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Reduce the frustration of waiting for a cheque to clear: understand payment rules & other available channels.

People transfer money and make payment using a range of methods, and Cheque is one of the methods.

Cheques are written for various reasons, whether in the form of a personal cheque written as a gift to you by a friend or a family member, or a business cheque issued for payment of goods or services rendered.

When issued by a cheque, there will be a need to cash it.

Knowing the rules and understanding the clearing process will help you get your money quickly, and without incurring unnecessary charges and fines.

The cycle starts when a bank receives a cheque.

If the cheque is from another bank, the presenting bank sends it to the paying bank via clearing house.

The cycle ends when payment is made or the cheque is returned for various reasons.

Cheque clearing is the process where the bank verifies the amount written on the cheque.

This process is called the clearing cycle and normally results in a credit to the account at the bank of deposit, and an equivalent debit to the account at the bank on which it was drawn.

For cheque drawn on a customer of the same bank, the bank would debit the account of the drawer.

But cheque drawn on the other banks (issuing bank) needs to be presented to a different bank before the depositor bank receives payment to cover the amount credited to the depositor’s account.

It’s always important to check with your financial institutions to know for sure when your cheque will clear.

According to the association for payment clearing services (APACS), cheque clearing operates on a three-day processing cycle.

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In general, the waiting period for a cheque to clear depends on several factors:

On day one, the collecting bank inputs the cheque details to the electronic interbank data exchange and it sets off for the paying bank clearing Centre.

On the second day, each bank hands over and collects the cheque to be processed.

On the morning of the third working day, the bank will review the cheque presented for payment and make a decision about whether to pay or return the cheque.

To speed up the clearing process, all of the information on the cheque needs to be complete and accurate.

The bank will receive a cheque into its clearinghouse; the cheque will then be scanned for compliance purposes.

To avoid complication, before presenting the cheque to the bank, make sure the cheque has the appropriate date, amount of payment and the signature.

If the information is invalid or missing, your bank will refuse payment on the cheque.

Both fields in the cheque have to be filled out.

The numerology should be the same as the written format of the cheque. If the numerology differs from the written format, the cheque would be returned to the sender and not honored.

Also, it’s very important for your name to be written correctly on the cheque.

Banks can deny payment if the name does not match that of the person attempting to cash it.

Signatures must match the current signature cards at the financial institution. This is for the purposes of fraud protection.

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If there is anything untoward about the cheque sometimes the banks will hold the release of the funds for two days to make sure that everything went correctly and there’s no problem.

In instances where there are not enough funds in the account when the cheque arrived at the issuing bank

The cheque would be returned as a dishonored cheque marked as non- sufficient funds.

When dealing with a stranger, before accepting a cheque you have to verify the trustworthiness of a person writing the Cheques.

Sometimes is very important to check with the bank where the cheque will be drawn on to confirm that the person writing the check has an account with funds available to cover the cheque.

After depositing the cheque you have to wait for several days in order to withdraw your cheque.

In the case where you are issuing or paying by a cheque, make sure you understand all the charges you could and keep a close eye on your account to make sure you always have enough money if you choose to pay by cheque.


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