Did you receive a foreign cheque from abroad? Whether you are repatriating funds or simply getting paid by someone abroad, you could be facing several difficulties. As simple and as straightforward as cashing a foreign cheque may sound, it comes with great hassles that remind us of how the banking system, and the world, operated some 100 years ago. It is unbelievable to us that this process is still as cumbersome, expensive, and borderline-impossible as it is. Our reader Jason has contacted us some time ago with an inquiry and we took on the chance to discover the best way to cash a foreign cheque in the UK. Below are our preliminary findings, in addition to the entire correspondence.
Are Banks Expensive for Cashing Foreign Cheques in UK?
Our findings are as follows 🔍
a. UK banks will cash foreign cheques but it will be expensive – it can cost you up to 5% of the cheque’s value with a bank. The clearing process take 6-7 days and will depend on a process called negotiation against the issuer of the cheque, which may be unsuccessful. If that process is indeed unsuccessful, it will take up to 6 weeks to clear the cheque!
b. Money transfer service providers such as Currencies Direct will not be able to cash or accept cheques made to the name of their clients. If you can change the cheque’s recipient to Currencies Direct, they will happily accept it and cash it instantly for a competitive FX fee, saving up to 80% of the associated foreign cheque cashing costs.
Can I Cash a foreign cheque for cheap?
🎬We believe the best and most efficient way to cash a foreign cash in the UK, while minimising fees, would be through a designated service i.e. international money transfer service. Re-issuing the cheque in the name of the company may be a slight hassle but for a large amount it may result in saving of hundreds or thousands of pounds.
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The story of Jason’s USD cheque and his attempts of cashing it
Our reader Jason has contacted us some time ago with an inquiry. He wanted to cash in his U.S cheque in the UK without having to wait for the funds to be cleared over a period of 6 weeks as the bank proposed to him. He wanted to inquire whether any of the FX companies we know can help him in his situation.
After some back and forth, he conducted a thorough research. Here are his findings. Please note that this e-mail is published with Jason’s consent. We are extremely gratful that he brought this to our attention.
Jason’s Email & Summary of his Findings
Cashing a U.S cheque in the UK
September 10, 2018 – Original inquiry sent via our Contact Us form
Cashing a foreign cheque with a money transfer company
We have made our inquiries to some of our partners in the money transfer field. The first to respond was probably the most agile and flexible money transfer firm out of the “big 10” – Currencies Direct. They have indicated that they cannot accept cheques made paypable to an individual but they can quickly clear cheques made payable to Currencies Direct. In other words, before you receive that cheque, you will need to know who is your FX provider and have the cheque to its name.
Currencies Direct or similar leading money transfer companies won’t charge you anything for clearing the cheque – but the standard FX margins they apply on all foreign currency transfers will apply, of course.
Alternatively you can always cash a cheque with a UK bank with the limitations stated above.
all accept foreign cheques, whether US dollar chques, Euro, or other currencies.
What did Jason do and how did it go?
Based on our findings, there is no way to cash in your foreign cheque. You have one of two alternatives – either get it on the name of the your foreign exchange provider so they can cash it instantly and for lower fees (hence “the best way to cash a foreign cheque in UK 2021” title), or use a bank to deposit it and wait 6 weeks for clearance, or use the bank’s negotiation service and pay through your nose. We are sure there are other solutions as well but knowing the financial services industry we would assume these solutions are more apt to small businesses receiving cheques from abroad on a regular basis than a one-off foreign cheque.