Cashing cheques in foreign currencies

Can I pay a foreign cheque into my UK bank account?

Most UK banks no longer accept foreign cheques, having replaced them with quicker and easier online bank transfer.

However, some banks – including NatWest and the Bank of Scotland – still offer this service, though it's often limited. In most cases, you can't deposit the cheque online and will need to visit a branch instead.

Also, there's usually a fee to process the cheque, and not all currencies are accepted. For example, NatWest no longer accepts New Zealand cheques.

What should I do if I receive a cheque in a foreign currency?

These days, it’s relatively rare to receive a cheque at all, let alone one in a foreign currency. But if you’re sent a foreign currency cheque, first, make sure you can pay it into your current account.

Cheques have to go through a clearing process, where the amount on the cheque transfers between accounts to settle the payment. UK cheques typically take just a few days, but foreign ones can take several weeks.

Your bank may refuse to accept the cheque if you don’t pay it in within six months.

How are foreign cheques paid?

There are two ways a bank can process a foreign cheque: a negotiation or collection service. Which method they use will depend on where the cheque comes from and what currency it’s in.

Cheque negotiation

This lets you use the money before the cheque has cleared. But if the cheque bounces or is stopped, the money could be deducted from your account.

Funds are usually paid into your account within 3-5 working days, but it could take longer.

You’ll also usually have to pay a fee. This might be a set figure or a percentage of the cheque amount. NatWest, for example, charges between £5 and £60, depending on the cheque's value.

Cheque negotiation is only used for cheques made out in the currency of the sender’s country – for example, a cheque from Canada made out in Canadian dollars. If you were to receive a Canadian cheque made out in euros, it would need to be paid by collection.

Cheque collection

This is where the bank waits for the cheque to clear (and the foreign bank to confirm the transaction) before crediting your account. This could take a while – sometimes seven weeks or more.

As with cheque negotiation, there’s usually a fee.

Your bank will probably use the collection method if the cheque is made out in a different currency to the one used in the issuing country, or if it’s from a country your bank deems high risk.

Can exchange rates affect the value of foreign cheques?

Yes. Your bank can set its own exchange rate to calculate how much you’re owed. This won’t always be the most competitive rate on the market.

You may find the exchange rate changes in the time between you depositing the cheque and it clearing – especially if it takes several weeks to process. You could end up with less than you would have received on the day the cheque was paid in. On the flip side, you could get more.

Anything else I should know about cashing a cheque in a foreign currency?

While it’s certainly possible to cash a foreign cheque in the UK, there are easier ways to transfer money between countries. Many online and smaller banks won’t even accept international cheques.

Remember, never accept a cheque from someone you don’t know or trust, as fraud can be a big issue with foreign cheques.

An electronic cash transfer is the fastest and safest way to receive funds from overseas. If possible, ask the person paying you to organise a bank transfer instead of writing a cheque.

You’ll need to provide them with your International Bank Account Number (IBAN) and Bank Identifier Code (BIC). These are similar to sort codes and account numbers.

You can find them in the account details section of your banking app or online account. While you may face steep fees and unfavourable exchange rates, the processing time should be much quicker.