Chequebooks

When you open a current account, you will usually be issued with a chequebook. A chequebook is essentially a booklet of payment slips; each slip is printed with your name, account provider and account number. When you wish to pay by cheque you must write out the name of the recipient (perhaps a person or company), the amount you wish to pay, and the current date on one of the payment slips, then sign your name. This authorises your account provider to pay the stated amount of money to the recipient. The money will usually be deducted from your account within three to five working days.

A chequebook is a payment method linked to your current account which offers an alternative to making cash payments. Although chequebooks are becoming less popular in the UK, primarily due to the rapid growth of internet banking and credit and debit card usage, personal cheques are still accepted. Cheques can also be made out to another account holder and used to make a deposit into that person's account; for example, a parent might give their child a cheque made out to the value of £100 for their birthday: the child gives this to the bank and £100 is paid into the child's account. Since November 2007 cheques have a guaranteed maximum clearing time of six working days, although the funds are often available sooner (for earning interest), perhaps within three working days.

It is important to note that if the current account balance does not cover the amount which the account holder has written on the cheque, the cheque will be refused. This is known as a 'bounced' cheque and a penalty fee will usually apply (see Bounced Cheques and Unpaid Items). You can write a post-dated cheque if you wish to delay the payment; the date that you write on the cheque is the date from which the bank should begin to process the cheque, enabling you to send a cheque in advance but ensure that the payment will not be taken before that date, when you are sure there will be sufficient funds in your account. However, in practice you may find that your bank processes your cheque without looking at the date or discourages the use of post-dated cheques. Check with an advisor at your bank if you are uncertain whether or not you are allowed to write post-dated cheques.