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Cheques

About cheques

On this page, you can find information about cheques, including:

You can get more information about banks and banking on Adviceguide - see Further help and information.

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What is a cheque

A cheque is a written instruction from you as the account holder to your bank or building society. It authorises payment from your account to whoever is named on the cheque (called the payee). A cheque must be signed and correctly filled in, otherwise the bank or building society may return the cheque unpaid.

If a cheque is crossed and marked 'account payee' or 'account payee only', it must be paid into the account of the person it's made out to. However, some companies offer cheque cashing facilities and they will cash a cheque marked 'account payee only'. They will charge you for this. If a cheque is uncrossed, or 'open', it doesn't have to be paid into an account. In this case, the payee can simply take the cheque to the bank and get the cash.

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How long should it take for a cheque to clear

There are rules about how long it should take for a cheque to clear. These rules apply to cheques paid into current, basic and savings accounts.

In a current or basic account, it should take a maximum of two days after paying in a cheque, before you should start earning interest on the money paid in. You should be able to withdraw the money within four days (six days from a savings account) and after six days, you can be sure that the cheque won't bounce. These limits are the maximum you can expect, but you might be able to do these things sooner.

If a bank or building society has wrongly advised you that a cheque has cleared, you may be able to claim compensation from the bank if you've suffered any loss.

You can get more information about the clearing scheme for cheques from the website of the  Association for Payment Clearing Services (APACS) at: www.apacs.org.uk.

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Cancelling cheques

You can ask your bank or building society to stop a cheque, that is, refuse to pay out against a cheque you've written.

It's not against the law to stop a cheque. However, it is a criminal offence to hand over a cheque with the intention of stopping it later, although this can be difficult to prove. If you hand over a cheque knowing that the bank or building society won't pay the amount, that is, it will bounce the cheque, this is also a criminal offence.

If you buy something by cheque and then you stop the cheque, court action can be taken against you for the money owing.

You may wish to stop cheques from being paid from your account if your cheque or cheque book is lost or stolen.

If you want to stop a cheque, you should telephone the bank or building society immediately, giving details of the cheque. The telephone call should be confirmed in writing as soon as possible. You'll normally be charged for stopping a cheque. A stop will cancel the cheque completely, unless a shorter period is agreed, for example, if you wish to delay payment until you have enough money in your account.

You won't usually be able to stop a cheque which you have used with a cheque guarantee card. However, check the terms and conditions of your account as there might be circumstances when you can stop a cheque.  You might have to pay a fee for this.

If a bank or building society pays out after a cheque has been stopped, they must repay the account holder. In certain circumstances, the bank or building society may try and get the money back from you, but you can dispute this. If you are in this situation, you should get legal advice.

For more information about getting legal advice,see Using a solicitor

Bounced cheques

A bank or building society must pay out on (honour) any cheque you write out, provided there is enough money in your account or the cheque is within the limits of an agreed overdraft. A cheque which is not paid out is commonly known as a bounced cheque.

If the bank or building society doesn't pay out on a cheque when your account is in credit or within an agreed overdraft, you can take action against the bank.

If you don't have enough funds in your current account to cover a cheque but you do have enough in another account, for example, a deposit account, your bank may use these funds to cover it. However, your bank or building society doesn't have to do this if it chooses not to. A bank or building society may also treat the cheque as a request for an overdraft, which it may decide to agree to, depending on your credit history.

You should be careful about accepting a cheque from someone you don't know or trust for an expensive item, like a car. If a cheque is issued fraudulently or is found to be stolen, the money can be taken back even after it has passed through the clearing system. If this happens, you should contact the account holder's bank straight away. Banks don't always take back money and each case should be decided on the individual circumstances.

If a cheque is returned unpaid, you can try to recover the amount from the account holder. If you don't know the account holder's address, you could:

  • write to  the branch on which the cheque is drawn
  • tell the police if  you suspect fraud
  • if the cheque is still not paid, you could consider going to court.

For more information about going to court, in England, Wales and Northern Ireland, see Small claims or, in Scotland, see What to do if someone owes you money or compensation for faulty goods or services.

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Lost or stolen cheques or cheque books

You must tell the bank or building society as soon as you can if you lose your chequebook or you've had it stolen.

Are you liable if someone uses your chequebook after it's stolen?

If you've lost or had your chequebook stolen and you think someone has used it to make an unauthorised withdrawal on your account, you must tell your bank or building society as soon as you can.

You will be liable for any unauthorised withdrawals which are made before you tell your bank or building society about losing your chequebook. However, this will only be up to a maximum of £50, unless you have acted fraudulently or been negligent.

You will not be liable for any unauthorised withdrawals after you have told your bank or building society, unless you have acted fraudulently or been negligent.

If your bank is holding you responsible for a cheque which has been lost or stolen, you should get advice from an experience adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

If you've not authorised the withdrawal, your bank or building society must refund the money immediately. If there is evidence to suggest you acted fraudulently or were negligent, they can delay the refund while they carry out further investigations. However, the investigation must be carried out within a few days.

Your bank or building society must have a way for you to report a lost or stolen card or where someone else has used the card details without your permission at all times.

Your bank or building society must be able to confirm in writing that you reported your chequebook stolen, up to 18 months after reporting it.

For more information about what to do if someone has used your bank details fraudulently, see Banking – security and fraud.

Cheques lost in the post

If a cheque is lost in the post, you should complete a Royal Mail claim form, available at post offices, and stop the cheque. The Royal Mail will check whether the letter was delivered and should refund the charge for stopping the cheque. If the cheque has already been presented for payment, you may be held responsible.

For more information about how to complain to the Royal Mail, see Problems with post.

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Further help and information

You can get more information about banks and building societies on the following Adviceguide pages:

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Citizens Advice

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