Cheque Brokers 2021 - Which Brokers Accept Cheque?
Cheque payments, otherwise known as bills of exchange, are written documents signed by individuals to instruct a bank to debit an account. Evolved from handwritten cheque payment orders years ago, current rules and features have made this solution more secure. We look at how and where traders can use cheques with online trading brokers, including deposit speeds and any charges.
Cheque Payments Overview
The cheque payments procedure is an established global payment method. It is accepted as a solution for businesses and individuals to send and receive money. With that said, usage rates are falling due to the introduction of innovative digital methods with countries including the UK submitting plans to phase out the payments system.
Pros Of Trading With Cheque
Many banks and building societies now accept cheque imaging, allowing payments to be accepted via mobile banking, reducing the time for funds to clear. This means that paper cheques can be used to electronically deposit and withdraw funds into forex trading accounts.
Bankers’ drafts cheques can be drawn in most major currencies, meaning traders from a host of different countries can, in theory, use the payment method. Cheques are also well understood given their long-standing use.
Cons Of Trading With Cheque
Cheques are arguably not as quick, secure and easy to use as many payment methods today, such as Skrill and Neteller. As a result, many countries have either stopped using cheques or are considering stopping them in the future. The UK Payment Council, for example, planned to phase out cheques as a payment method, though this move has been paused. Still, it’s unlikely that many traders will use cheques in the future.
Traditional cheque payments are slow to receipt vs digital methods and it can take up to 7 working days for funds to clear. This is a real drawback for traders looking to deposit funds into their forex account so they can start trading quickly.
Despite being an established payment method, cheques are currently only integrated with a select list of online trading brokers including SpreadEx and Interactive Brokers. We don’t expect this to increase as businesses move to more secure digital payment gateways.
Traditionally cheques can take up to 7 working days to clear, however, many banks and building societies now accept payments online via mobile app or tablet, meaning deposits can clear by the next working day. Note, there may be a funds limit on cheque payments accepted via digital methods. Some cash brokers offer cheque cashing for instant withdrawal of funds, subject to a fee.
Electronic payment gateways provide a safer deposit method vs cheque. Banks have no liability if payments details such as account numbers or payee information are incorrect and may not provide reimbursements. To help prevent issues, you should keep proof of payment and follow the advice below when using cheques:
- Add a line to any blank spaces
- Keep the cheque stub for reference
- Write the name of the person/organisation you are paying
- Include a format of a cheque payments covering letter
Deposits & Withdrawals
To make payments, locate the cheque logo within your trading account. Providers such as Interactive Brokers accept cheque deposits from Hong Kong, the USA, and Canada, with details to be submitted in the fund transfer section of your account before sending. Maximum and minimum payment limits, daily transfer amounts, and processing times may differ between cheque accepting brokers.
Speak to the provider’s customer support team if you have any questions or if you have issues, such as the cheque payment hasn’t been received.
It is usually free to use cheques as a payment method though brokers may charge if they are subject to business costs. You may also be liable for charges including stopping a cheque or bounced transactions.
Are Cheque Payments A Good Choice For Traders?
The cheque payment system is a simple transfer option established for many years. The deposit method has also now gone digital, improving processing times. However, cheques are not widely available in today’s online broker market and there are a long list of faster and more secure transfer options.
How do I know if my cheque payment has been received?
Most banks and building societies work to specific processing times. If your cheque payment has not been processed it may be worth showing proof or cancelling the payment as not received before using an alternative method.
Why are cheque payments not accepted at some businesses?
Electronic transfers are much quicker and safer to process than cheque payments and offer reduced fees for businesses and individuals.
How long do cheque payments take?
When a cheque payment has been made, funds usually leave your account three working days after the recipient pays in the cheque. Clearance can take up to seven working days.
What is an e-cheque payment system?
An e-cheque is an online cheque payment if your PayPal account has insufficient funds with no credit card or bank linked.
What should be included in the cheque payment covering letter format?
A cheque payment covering letter should include the following; date, institute name, institute address, reference numbers, sender name, sender contact details, and signature.