how long does a bankers cheque take to clear

4 full working days (if lodged across different banks, i.e. cheque is drawn on Bank of Ireland but lodged in AIB). So, if a cheque is lodged on Monday, the funds will be available at about midnight on Thursday (technically Friday, but it's more a 4 day cycle than a 5 day one).

Here is the cycle:

Day 1 - 'Lodgement Day'. Cheque lodged to AIB account in AIB branch and forwarded to AIB central clearing department that evening. The value posts to your account immediately (you will see this on your account ledger on internet banking) but is not yet 'cleared' so does not form part of your 'available funds', i.e. you cannot withdraw it or transfer it.

The cheque gets processed through a reader/sorter machine in AIB's Clearing Dept. overnight and the paper and value is exchanged with the Bank of Ireland in the early morning of Day 2, i.e. Bank of Ireland pays AIB for the cheque and AIB sends the cheque on to them.

Day 2 - cheque received in Bank of Ireland and processed through their reader/sorters. Cheque value is debited from the Bank of Ireland Account (in this case Dept of Social Welfare account).

Day 3 - Bank of Ireland legally has until close of business today to

unpay the cheque. If they decide to unpay it takes a further day for AIB to be notified of this, bringing you to day 4. That is why AIB will not make funds available to you until about midnight on Day 4 (going into Day 5). As if it did, and then subseqnetly Bank of Ireland unpaid teh item AIB would be left with teh loss.

Can you tell I worked in a Clearing Dept for a really long time.

If this cycle is a pain in the neck for you and you are a reliable customer with a good history you could apply to your bank for a small overdraft so that you aren't always waiting on your money. Furthermore - although I don't think this option is widely offered any more - if you are really trustworthy your bank may switch your account to 'Pay Ledger' which means when you lodge a cheque to your account the bank will honour it immediately as they know you would be 'good for it' if it were to came back unpaid.

p.s. I think it is 2 full working days if the cheque is lodged within the same bank that it is drawn on, as no exchange of paper or value is required


Category: Bank

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