![]() ![]() Stop PaymentĪ “stop payment” is a service provided by your financial institution, usually for a fee, to prevent a cheque you wrote from being cashed. To protect against someone else fraudulently cashing a cheque, John Smith can write “For deposit only to account of payee” with his signature, which ensures the cheque can only be deposited into Jane Doe’s account.Ĭheck with your financial institution to find out if they accept counter-signed cheques and if they have any specific requirements that apply. You can then endorse the back of the cheque and deposit it into your account. For example, if John Smith writes a cheque to Jane Doe, she can endorse the cheque on the back and give it to you in payment of a debt. Some banks allow cheques to be cashed by someone other than the person named on the front of the cheque if it is counter-signed. Cheque Cashed By a Different Individual (Counter-Signed Cheques) The cheque can be returned and the amount credited back to your account up to the day before the date written on the cheque. If a post-dated cheque you wrote is mistakenly processed before its date, you should contact your bank to let them know. Try to regularly review your transactions through online, mobile or telephone banking or at an ABM. You can help in detecting post-dated cheques that are cashed early. Banks have processes in place to look for post-dated cheques and do their best to make sure they aren’t processed early. Sometimes a post-dated cheque is deposited before the date on the cheque. You can avoid these fees by ensuring there is enough money in your account to cover the cheques that you write. ![]() If you were the cheque-writer, very often your financial institution will charge an NSF fee. If your bank had given you immediate access to the funds, it will then remove the funds from your account. If you deposit a cheque and there is not enough money in the cheque-writer’s account to cover the cheque, the cheque will be returned to your bank as NSF or non-sufficient funds. In addition, rather than receiving a paper cheque as payment from your employer, the government, or individuals, see if the funds can be deposited directly into your account by direct deposit or ask them to send you an e-mail money transfer: then you will have immediate access to all of the money. If your financial institution is currently putting a hold on your cheques, ask if there are alternatives to this hold. The maximum hold period for most cheques deposited to a Canadian dollar account is four business days, and banks must make $100 available within a day. Banks are required to provide their hold policies in writing when an account is opened. This hold protects you too since you won’t be spending funds from a cheque that might be reversed because of insufficient funds in the cheque-writer’s account. Cheque Holdsīanks may apply a hold on funds deposited by cheque to manage the risk from losses in case there aren’t sufficient funds in the cheque-writer’s account to cover the cheque. What most people don’t realize is that, until it receives that confirmation, the bank is really advancing you the money. ![]() However, it isn’t until your bank gets confirmation from the cheque-writer’s bank that it knows for sure that the funds are available. This process can take a few days but, for most cheques, the bank makes the funds available to the customer right away. That bank makes sure that the cheque is legitimate and there are enough funds in the cheque-writer’s account to cover the cheque, and then sends the funds to your bank. When you deposit a cheque into your account, your bank will send the cheque to the bank of the person who wrote the cheque. How Cheques are ProcessedĪll cheques must be processed – or cleared and settled – through the payments system. Here is some helpful information about the use of cheques and how they are processed by financial institutions. So when you write a cheque, you are agreeing to pay another individual or organization money that you owe them and you are instructing your bank to make that payment. 1Ī cheque is an agreement of payment between two individuals or organizations. ![]() What happens if they hit a bump in the roadĬanada has one of the most efficient cheque clearing systems in the world and, while the use of cheques has been declining with the growing popularity of electronic and card payments, financial institutions in Canada still process nearly a billion cheques every year. Canada has created a video to explain how cheques travel through theĬanadian payments system, why those cheques are “image-conscious” and ![]()
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