On a rare occasion, you may find yourself in the position of needing to cash a cheque.
Can you cash a foreign cheque in the UK? Yes, it can be possible to cash a foreign cheque. Some UK banks will allow you to cash the cheque depending on where the cheque comes from, what bank it is drawn on, which currency it’s in – and how long you are willing to wait.
While it is possible to cash a foreign cheque, an electronic cash transfer is the most efficient way to move funds to your account while you’re in the UK. If you’re a short-term visitor, it will be virtually impossible to make the transaction in time.
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Getting Started. What will Work?
Cashing any foreign cheque in the UK isn’t easy and take a significant amount of time. If you need the funds relatively quickly, attempting to cash a cheque is not the way to go. Fortunately, access to personal funds electronically is more convenient and efficient than ever.
According to Barclays bank, if you want to cash a foreign cheque, you’ll need a local account. If you have an account in the UK, you are one step closer to getting your cheque cashed. But the cash won’t be immediately available.
Instead, at a local bank branch, you will deposit the foreign cheque into your account. Depending on the particulars of your cheque, it will be deposited into your account through either a negotiation or collection process. The transaction will be assessed a fee, depending on the amount of the cheque and/or the bank’s policy.
Whether it’s negotiation or collection depends on:
- where the cheque comes from and
- what currency it’s in
If a cheque is made out from one country but is in a different currency than the country of a cheque, the cheque will be held through the collection process, which means an additional delay.
Watch out for high fees. Using banks can incur high fees and you should look into what will be most cost-efficient for you. For lower value cheques this may not be an issue but if you are looking at several thousand dollars then you could lose out on a significant amount of that money.
Here Is How Each Cheque Cashing Process Works
Negotiation lets a bank customer use the funds from a foreign cheque before the cheque has cleared. The amount of the cheque will be credited to your bank account after three or more working days.
The credit is only temporary – until the cheque clears. If the bank the foreign cheque is drawn on rejects the cheque, the amount is taken from your checking account.
With the cheque collection process, the bank does not credit your account until the cheque is completely cleared through the foreign bank. You will wait until the cheque has been cleared and the funds obtained from the bank before crediting your account. This takes on average about 4-7 weeks. There is also a fee.
How Long It Takes
There is no standard timeline for how long it might be until you’ll have your funds. It varies widely, based on the country and currency of the cheque.
Danske Bank reported a process similar to Barclays, also stating on their website: “We recommend that funds from abroad be sent by bank transfer rather than by cheque. Bank transfers are faster, cheaper and safer.”
The wait is generally long because the cheque needs to be physically mailed back to the foreign bank for processing. Maybe even to a specific branch. The bank the cheque is sent to will have its own process and timeline for sending funds back to the UK. Between the mailing, exchanging and processing, this method takes time.
Sometimes it takes so long, that the exchange rate between currencies can change during the process. Whatever happens, you will be paid in the amount that was quoted on the day you presented the cheque to the UK bank. It may be favourable by the time your funds clear.
Opening a Bank Account in the UK
Traditional banks will require more information to establish an account. They generally require proof of address, that you can work in the UK so visa or passport and potentially require proof of income or a certain amount to be deposited each month into the account.
You’ll need the following pieces of information to present to your new bank:
- Proof of identity
- Passport, driver’s license, ID card
- Visa if applicable
- Proof of address
- Types and number of pieces varies by bank
Providing that information can be difficult without a permanent address, although it’s getting easier with new-age banks like Monzo and Starling. You will need a UK mobile number, UK address (so you can be sent your card etc) and proof of identity. Both Monzo and Starling accept cheques GBP, however, unable to accept foreign currencies cheques.
International Bank Accounts
Some banks offer international bank accounts, with the option of working in multiple currencies and easing both the process and cost of funds transfer.
Major UK banks, such as Lloyds Bank, HSBC, Citi Bank and Barclays, offer international accounts. Each bank will have its own policies, procedures and standards of eligibility. Some eligibility areas include:
- Proof of Identity – Your passport and driver’s license or state ID. Many banks require two forms of ID.
- Proof of Residency – You may need proof of residency in the United States, proof of an address in the foreign country, or both.
- Startup Funds – Banks often have minimum startup funds required for deposit.
- A student or work visa if you need one for the country
- A university letter or proof of school enrollment
- A letter of employment or employment contract
While international accounts can simplify the process of working with money in multiple countries, this is the kind of thing you probably want to get taken care of before you leave home.
If you plan on opening a bank account in your destination country, you can even begin the account opening process prior to arrival through the international banking centre of your home bank.
To hold a local account in a foreign currency you’ll probably need to be living or working abroad at least some of the time. It can ease your money transferring woes but at a cost. There are likely to be charges for the account itself.
Alternatives to Cashing Cheques in the UK
Cheques are nearly obsolete in your everyday life at home, you can imagine why they’d be difficult to work with overseas. There are so many options that exist to make financial transactions easy while you’re visiting another country.
Organizing a bank transfer is a much smoother transaction when abroad. While you’ll still encounter some pretty high fees and exchange rates. I don’t generally recommend using your bank to transfer money due to the fees.
If going this route, first find out how many pounds you’ll receive when all is said and done. You can then check how much your transfer service quote you against the “interbank rate” online.
The interbank rate is the rate that is used between banks when they transfer and trade money between one another. XE.com is one source for the interbank rate.
Agencies that can transfer your money:
- Wise – this is what I use for my business and personal accounts to send money from USD, AUD etc to my UK bank accounts.
- Currency/Forex brokers like Currencies Direct, TorFX and Money Corp
- High street/major UK banks – generally the highest fees
- Services such as Western Union or PayPal
In short, there is no easy overseas, cross-border cheque clearing system. Your foreign cheque must be physically mailed back to where it came from, processed there and then the funds must be exchanged and entered into your account in the UK.
If you have the account and the time, you’ll still encounter significant financial penalties, in the form of high fees, for engaging in this process.
Advice for Consumers Receiving Payment Abroad
There are a variety of methods for making payments abroad. From electronic transfers to currency brokers. The UK’s Pay Your Way website offers advice and information to help you understand your options and choose the one that best suits your needs.
If you have a choice in how you are being paid from home while you’re in the UK, request an automated payment directly to an account you can access in the UK.
There are certain pieces of information the sender will have to know, such as your International Bank Account Number (IBAN) and your Bank Identifier Code (BAC). These international identifiers ease the transition of funds directly into your account in the UK.
Speak to your bank before you leave home. This is the best way to ensure you know how to handle and receive any payments while you are in the UK. Figuring these things out before you’re overseas can save you a lot of time and headache.
Hi, I'm Kat, an Australian that moved to London in 2013 to start a new adventure. What a roller-coaster that was! I love helping others move to the UK and people explore the world! I’d be honoured if you’d say, “Thanks!” with a £3 coffee on Ko-fi.