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The changes, known as 2-4-6, are a major development that will benefit anyone who accepts a cheque, banker’s draft or building society cheque. The changes will apply on all cheques paid in to major banks and building societies in the UK with effect from Friday 30 November.

For the first time, after paying in a cheque, customers can be sure that at the end of six working days, the money has safely cleared and they are protected from any loss if that cheque should subsequently bounce.

The changes set maximum timescales for the day that customers can expect to earn interest, or when the balance on which overdraft interest is charged is reduced. This will be no later than two working days after paying in a cheque.

Customers will be able to withdraw money no later than four working days after paying in a cheque under the new maximum timescales. Banks and building societies will still compete to offer services that beat these guaranteed limits.

Certainty and clarity 

In research commissioned by the Cheque and Credit Clearing Company, less than a quarter of cheque users surveyed knew the correct timescales for cheque clearing, and more than half were worried about accepting cheques for fear they may bounce.

The 2-4-6 changes address these uncertainties, and provide guaranteed maximum time limits on cheque clearing to help businesses and personal customers decide how best to manage the cheque payments they receive.

Angela Thomas, Cheque and Credit Clearing Company Managing Director, said, “Although cheque use has fallen over the last few years, cheques remain important for certain customers in certain situations. Whether it’s a small business or someone selling a car, there are many occasions where cheques still get handed over. These changes will really benefit anyone paying in a cheque, offering them certainty and clarity on when the money has cleared and giving real peace of mind.”

Despite the positive change, the industry continues to remind customers to be wary of accepting cheques if they don’t know or trust the person offering them the cheque. Other options include CHAPS or making an online or phone payment.

Downloadable advice guides 

Any customer who is uncertain about clearing timescales for a particular cheque should check with their bank or building society.

The Cheque and Credit Clearing Company and APACS have issued downloadable advice guides and a range of information for personal and business customers, available free from their websites, to explain the changes.

These changes cover cheques, bankers’ drafts and building society cheques drawn on and paid into a UK current or basic bank account. For saving accounts the maximum time limit for withdrawal is longer, six days instead of four.

Basic bank account holders are likely to be able to withdraw cash more quickly than before as a result of these changes. Small businesses will benefit from the certainty of funds for managing their cash flow, and for deciding when to release goods and services that are paid for by cheque.

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• APACS
• Cheque and Credit Clearing Company