Cheques: How to Write and Use Them

Cheques account for only 1% of payments in the UK, but if you need to write one you must do it correctly so a bank does not reject it. Our guide will show you the basics.

Rebecca Goodman 14 November 2020

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The number of cheques we use has fallen significantly over the past decade, although some people still use them to send gifts or pay bills.

Cheques account for around 1% of payments in the UK, according to the most recent data from UK Finance, but if you need to write one it’s important you do it correctly so it’s not rejected by a bank.

Here we explain what you need to know about writing a cheque, what happens if it bounces because there’s not enough money in the current account it’s drawing on, and the best alternatives to cheques.

What is a cheque?

A cheque is a payment method which has largely been replaced by automatic bank transfers and debit cards.

Many retailers no longer accept cheques, but they can be helpful if you want to send money as a gift or pay for a service, such as one provided by a tradesperson working in your home.

When someone writes a cheque, it tells their bank to pay someone else an amount of money. The person receiving the cheque pays it into their bank and the money is transferred in.

Cheques are no longer a guaranteed form of payment so significantly fewer places accept them as a form of payment for goods. You should also be very careful about accepting a cheque as payment and request cash or bank transfer.

How do I pay in a cheque?

To pay one in, you’ll usually need to visit your bank branch or a post office. You will have to complete a paying-in slip, and either use a machine or do it over the counter. However, some banks, will let you pay one in via their smartphone app. Simply take a photo of the cheque and upload it with details of the amount and the payee.

Cheques do not have expiry dates, but banks may refuse to pay a cheque if it is more than six months old. This means it is always best to pay in cheques promptly.

How do I write a cheque?

It’s important to fill out a cheque correctly because any mistakes could mean the cheque will be rejected and returned to the person who wrote it.

You will need to include the following:

  • The name of the person the cheque is going to.
  • The date.
  • The amount of money being given, in words and numbers.
  • The signature of the person paying the money.

How long does a cheque take to clear?

When a cheque is paid in, an image-based system is now used to verify the cheque and authorise a payment to be transferred.

If a customer pays in a cheque on a weekday, they should be able to withdraw the money by 23.59 on the next weekday, according to the Cheque and Credit Clearing Company.

Why does a cheque bounce?

If you’ve written a cheque out for someone and if by the time they pay it in there isn’t enough money in your account, it will be rejected, or ‘bounced’, and returned to your bank.

To avoid this happening, you need to make sure you have the money available in your account, bearing in mind that it may take time for your account total to reflect the payment. To ensure the money is paid as soon as possible, you could try a quicker method for transferring the money, such as an automatic transfer.

What can I do if a cheque bounces?

If a cheque you’ve written has bounced, your bank will contact you to tell you. It’ll usually give you a time frame for paying the money into your account so the bank can transfer the money over to the person you made the cheque out to.

But if this doesn’t happen, the bank could charge you a penalty fee. This fee used to be up to £25, but most banks have now waived the fee. Check the terms and conditions at your bank to find out its rules for penalty fees.

The best alternatives for writing a cheque

There are now lots of quicker and contactless ways to transfer money.

These contactless payment options include making an electronic transfer from one bank account to another, sending money via your bank’s app, or sending payments with a mobile payment app or mobile phone number.

To send money to another bank account, you’ll usually need the person’s name, sort code and account number. While if you’re sending via your phone, you can do so through the Paym system with just the recipient’s number, and there are 15 UK banks signed up to the service.

About the author:

Rebecca Goodman is a freelance journalist who has spent the past 10 years working across personal finance publications. Regularly writing for The Guardian, The Sun, The Telegraph, and The Independent. Read more

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