Cheque clearing in the UK

Only if you stay in credit. And most will have their salaries paid direct every month, so the bank has the use of much of that money for some time.

I recently wanted to buy some relatively low cost electronics from Sweden. The firm was small, and didn't take credit cards. Not possible to do an electronic transfer from Barclays, and a cheque would have been too costly. I eventually sent cash in the form of Euros. So much for progress.

IIRC the Chancellor has given the banks a date recently to get this down to

Euros? I am suprised that SEK wouldn't have been better.....

It used to be, but it now seems Barclays take five working days. Halifax is nine working days, i.e nearly a fortnight !!

I once paid cash into a branch of Natwest, to a Natwest client's account at another branch. It took three days to show up in his account. HSBC shows up the same day if done before 4pm.

Hence my comment about a day or two. It takes about that long to get the cheques exchanged and scanned.

It is an issue because such a situation typically involves two or more banks (i.e. independent companies).

I've a feeling that many people think that "the banks" are some sort of single entity so that, for example, Barclays has full knowledge and control over all of NatWest's customers accounts and vice-versa.

If a fraudster writes lots of cheques on their NatWest account and gives them to people who bank with several other banks then, once the fraud has been discovered, NatWest will have to waste a substantial amount of time and effort verifying the fraud and compensating the other banks. This sort of thing isn't handled automatically because it involves the transfer of money out of one company into another and the proof of the fraud is held in several places (the cheques with the other banks and the account balance with NatWest).

Computers and the internet have made banking much easier in some respects but the back-end processing that goes on is still fairly complicated, mainly for legal rather than practical reasons, which is why comparing cheque clearing to first class post isn't really a fair comparison,

Cheers,

John

That's because 'clear' is the wrong word if you want to know if a cheque has been deposited irrevocably in your account.

I think you need to ask if the cheque has been 'paid' or something like that. This has been discussed quite a lot in the uk.finance newsgroup.