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How long does it take to clear a cheque?
It normally takes three business days to clear a cheque if it is drawn and payable on a member bank of the Irish Paper Clearing Company Limited (IPCC). The cheque is lodged on Day One. It is exchanged with the bank on which it is drawn on Day Two. The customer on whose account the cheque is drawn is debited on Day Two or Three.

In the event that  the cheque is to be returned unpaid for any reason, it will be returned by close of business on Day Four to the payee’s bank.  It will therefore be Day Five before the payee’s bank knows that the cheque is being unpaid.   

 
While the clearing cycle normally takes three days, certainty of payment can actually take up to five or six days. Depending on a particular bank's policy in relation to risk control, customers are not always permitted to draw down the funds ahead of this timeframe, in order that the bank may be certain that the cheque will not be returned unpaid.

If your bank or building society is not a member of IPCC, you should contact it directly to confirm its clearing cycle.

Why does it take so long to clear a cheque?
A cheque is an historical payment instrument which, unlike an electronic payment, requires manual intervention in transporting it from the bank branch in which it was lodged to that bank’s clearing department and then on to the clearing department of the bank on which it is drawn. The reason for this is that a cheque has to be physically processed by the bank on which it is drawn in order to debit the customer’s account and it also needs to be examined for fraud and security reasons. Cheques drawn on and payable at the same bank generally clear faster.

Can cheques be stopped?
A stop can be placed on a cheque provided it has not already been paid. The bank should be contacted with details of the particular cheque, i.e. the date of issue, cheque number, the amount and the payee.

Do cheques go out of date?
It is the practice of banks in the Republic of Ireland to decline cheques which are presented for payment six months (or later) than the date of the cheque.

Must a cheque be lodged to the named payee on the cheque?
In some circumstances cheques may be endorsed over to a 3rd party by the named payee. However, in many cases cheques are crossed (e.g. not negotiable, account payee only, & Co.) and these should not be lodged to 3rd party accounts.

Is there a cross-border cheque clearing service?
There is no centrally managed cross-border clearing system in operation for cheques and so it is strongly recommended to use electronic payments for accepting or making cross-border payments. Cheques drawn on foreign countries lodged in a bank in the Republic of Ireland may take a considerable time to clear (check with your bank) and may be returned unpaid in accordance with the legislation and/or clearing rules in place in the country in which the cheque is drawn. For some countries this can be at any time in the future. If the cheque is denominated in another currency, the beneficiary will be exposed to exchange rate fluctuations until the value for the cheque is received.

What is the difference between a cheque and a bank draft?
A bank draft is similar to a cheque, with the primary difference being that it is drawn on a bank rather than a customer account. Because of this, bank drafts have a certainty of fate in that they will not be returned unpaid unless they have been counterfeited, fraudulently altered or stolen. It is for this reason that it can be a preferred method of payment instead of a cheque. However, it should be noted that the value clearing cycle for a bank draft is usually the same as that for a cheque. Of course, an electronic credit transfer is generally quicker and more cost-efficient to process than a bank draft.

As a company, can I design my own cheque?
Yes, you can design your own company cheque. Click here for Recommended Guidelines for Printing and Using Company Cheques in the Republic of Ireland.

For further information on cheques please click on the menu to the left.