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Cheque your payment dates to avoid penalties

Published 27/04/2011

Consumers and businesses have been warned that cheques could take up to two weeks to clear because of the back-to-back bank holidays.

Cheques clear current accounts two working days after they are paid in, but the money cannot usually be withdrawn until after four working days, while there is no guarantee that a cheque will not bounce until six working days have passed.

With only five working days from April 20 to May 2, a cheque paid into an account on Wednesday April 20 may not have fully cleared until Wednesday May 4.

The Payments Council has urged people to check the time scales for paying bills over the coming days to ensure they will not be stung with penalty charges as a result of delays.

It advised people who usually pay bills by sending a cheque through the post to consider using the faster payments system instead. Under this system, payments generally clear on the same day regardless of whether it is a non-working day.

The group also confirmed that although direct debits are not processed on bank holidays, money is taken from accounts on the nearest day to when the bill is due to ensure it is never paid late.

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