Best Cheque Brokers 2024

Cheque payments are a traditional transaction solution. By definition, the payment gateway is referred to as an order to a bank or financial institution to pay a specified sum to an alternative account. The rules require the request to be written on a specially printed form. This review will cover how long payments take to clear, how to complete a deposit to a live trading account, plus typical fees. We will also explore the modernised cash imaging process, making the payment gateway a more convenient deposit option for UK traders. We list the top brokers that accept cheque payments below.

What is a Cheque Payment?

Cheques are a hand-written document instructing a bank or building society to debit your account and credit an individual or organisation, such as an online broker. For a cheque to be cleared for approval, there must be adequate funds in the customer’s bank to cover the intended payment. Importantly, it is a recognised payment method, including at some trading brokers.

Cheque transactions became popular in the UK in the 20th century as an alternative to cash payments, with volumes peaking in the 1990s. Cheques now account for less than one percent of retail bank payments, totalling £185 million transactions in 2020 vs £272 million in 2019.

Today, the traditional method is being replaced by electronic solutions that provide more convenience and faster processing times. Some banks, however, are utilising e-cheque payment systems, meaning customers can take photos of a cheque and upload them to their mobile banking app. This procedure aims to modernise the relatively outdated system.

How Does a Cheque Payment Work?

The payer inputs the required details directly onto the cheque. Information includes the transaction value, name of the recipient and initiated date. A cheque must have the signature of the payer as a signal of authorisation for the bank to process and pay the amount of money stated.

Cheques can be submitted to your local bank branch or registered online via your mobile application. Note, it is not standard practice for UK banks to automatically re-issue cheque books anymore. A request should be made online or via your local banking branch if required.

Fees

Using the established cheque gateway is typically free. Your bank may apply charges for proof of receipt, tracking services, or failed transactions. It is uncommon for trading brokers to pass on fees for this payment method. For example, SpreadEx accepts cheque deposits from UK investors. The broker does not have any fees, although minimum deposit requirements must still be met.

Speed

Standard cheque processing times to a live trading account can be up to five working days. Fortunately, most UK banks now use cheque imaging, which allows payments to clear much faster. Barclays, for example, states that cheques can now clear and be available in your account on the following working day.

Note, weekend dates may cause a delay in cheques being accepted. NatWest, for example, indicates that if a cheque payment has been made after 3:30 pm on a weekday or a Saturday, it will be subject to a two-day clearing time.

Security

Cheques are vulnerable to fraud and theft. In fact, cheque fraud is one of the most common forms of financial crime due to its reliance on human intervention and manual processing requirements. According to the Financial Times, cheque fraud totalled £12.3 million in 2020. Fortunately, utilising the payment system on the internet is making it a safer and more secure solution. Nevertheless, there are an increasing number of phishing frauds, with impostors using fake banking emails and requesting funds to be sent to counterfeit account numbers.

There are several steps that you can take if you are planning on using a cheque as your trading deposit method. This includes keeping a proof of payment, writing cheques in serial number order, drawing a line through unused spaces and posting high-value cheques via secure mail. It is worth contacting your broker if funds are not cleared within a few working days to check why it has not been received or accepted.

How to Make a Cheque Deposit & Withdrawal

To make a cheque deposit or withdrawal transfer, you will first need to ensure that your broker accepts it as a payment method. Some forex and stock brokers today only offer electronic deposits. Remember, payment limits and minimum deposit requirements may also differ between brokers. Details should be provided on the broker’s deposit and withdrawal page. This will include the registered institution name, sort code and account number to be included on your cheque.

It is worth reaching out to your broker’s customer service team for any questions about the payment method or concerns if a cheque deposit has been received.

Benefits of Cheques

• Cheap – Using cheque payments to deposit to a trading account is often free. With that said, third-party bank charges may apply for additional services including tracking and proof of receipt
• Easy-To-Use – Writing and making a payment with a cheque is a simple process. There is no need to navigate sometimes complex online systems, complete digital documentation or provide identity verification. Simply complete the details on the cheque and post it to a brokerage
• Shift To Electronic Imagery – Most UK banks now use cheque imaging, significantly reducing the time required for funds to be processed. Traditional payment cheques can now be deposited electronically so funds can be available to deposit to live trading accounts in a matter of hours

Drawbacks of Cheques

• Slow Processing Times – Standard cheque payments to a brokerage account can take between five and seven working days to clear. This can make it challenging to react to market opportunities
• Phasing Out – Despite being an established payment solution in the UK, it is not a well-used deposit method at online brokers. See our list of brokers that accept cheque deposits to start trading today.
• Fraud Concerns – Given the manual processing and human involvement in cheque payments, it does increase the likelihood of fraud and scams. With no electronic tracing, it is difficult to track and intercept. Ensure you are following safety tips such as putting a line through blank spaces to protect yourself from potential security breaches. Also sign up with regulated and trusted trading brokers.

Cheque Payments Verdict

Our review has found the number of UK brokers accepting cheque payments is limited. Nevertheless, they provide a cheap and easy-to-use solution for depositing to a live trading account. Now integrating an electronic element, traditional cheque payments are being modernised, improving clearing times significantly.

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