Why does it take 3 days for a cheque to clear?

Question

Why does it take for a cheque to clear in 3 days? What are the processes of clearing it?

Answer 1

The Federal Reserve used to mandate the time to reconcile the accounting involved in clearing checks across their districts. With the advent of the computer a check can/could clear instantly. Many banks choose not to clear checks instantly as they want to use the "float" on the money. In other words they borrow, loan against, or invest the amount of the check (float) and profit for that short time period. Yes, it's only a few pennies usually, but when you consider that billions upon billions of checks are cleared it adds up quickly.

Answer 2

First it has to get deposited into the bank of whoever you wrote the check to. Then they have to send it for processing, so the routing number and account number can be recorded and forwarded to the correct bank. Then the processing company will contact your bank and make sure the funds are available and have them cleared from your account. Then your bank gets copies of the voided check. All this takes 2-3 days, unless you write a check to a company who uses the same bank as you, then it can take as little as 1 day because they don't have to send the check out for processing.

Answer 3

I hear that many checks can now clear quicker, even overnight, with banks that are on-line. Gone are the days when you could write a check on Friday and wait until Monday or Tuesday to make a deposit. Your bank should have sent you a letter.

Answer 4

You really need to move your money to a faster bank.