Best way to cash a foreign cheque in the UK

In theory, it’s quite straightforward to cash a foreign cheque in the UK. But not every bank offers it and they all charge different amounts. It could pay to compare your options to make sure you’re getting the best deal.

NatWest Select Account

9 Excellent

Minimum opening balance	£0.01
Account fees	£0
Interest (AER)	0% AER

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£200 switch reward.

You can cash a foreign cheque at NatWest, but it has to be done in a branch. The fee NatWest charges depends on the value of the cheque. Under £100 costs £5, £100.01 to £5,000 costs £10, £5,000.01 to £20,000 costs £30 and anything above £20,000 will set you back £60. There are also postage fees to think about, which vary depending on the collection method for the cheque and where it has been sent from.

The money can be in your account in as little as 2 working days, but could take up to 12 weeks, depending on the country. Cheques can be returned unpaid for up to 7 years if it's found to be fraudulent.

Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39.49% EAR variable.

• Pros and cons

  Pros

  • No monthly fee
  • Emergency cash option
  • Easy to open and manage
  • Arranged overdraft available
  • Access to mobile banking app to help you manage your finances
  • FSCS protection

  Cons

  • No interest paid on in-credit balances
  • Interest charged on overdrafts
  • Limited features and benefits

• More details

  Minimum opening balance	£0.01
  Minimum operating balance	£0.01
  Switch service guarantee	Yes
  Account fees	£0
  Overseas card transactions	2.75%

Minimum opening balance	£0.01
Account fees	£0
Interest (AER)	0% AER

See dealRead review

Difference between negotiation or collection methods

There are 2 different ways a bank can process a foreign currency cheque – by negotiation or by collection.

When a foreign cheque is paid by negotiation, your bank will credit your account with the money from the cheque. This is usually within a few days or a week. How long you have to wait for it to clear depends on where it’s from and what currency it’s in.

If the cheque bounces, your bank can take the money back out of your account. If this happens you’ll have to contact the issuer of the cheque to resolve it and get your money back.

This method is only possible for cheques made out in the same currency as the country it was sent from.

Payments by collection are likely to take longer because your bank will wait until the funds have cleared before crediting your account. It can take a while for this to happen because the cheque needs to be physically sent to the foreign bank. You’ll be relying on postal services in multiple countries before the banks can give you your money.

This type of payment is used if the cheque is in a different currency from the sender’s country or if the bank thinks the country is a high risk.

Both types will usually have fees, so you’ll need to see what your bank charges for each before deciding which to use.

Downsides

It can take a while for a cheque paid into your account in foreign currency to be credited into your account. Even if it happens quickly, there’s still a chance the cheque could bounce and you’ll lose those funds. You also have to worry about fees.

A lot of countries have stopped using cheques or are phasing them out, so it might not be the best way for you to receive money in your account from overseas.

Alternative methods

Bank transfers

This is a simpler way of sending a cheque, with the money coming from the sender’s account to your account directly. Your banks will still need to facilitate the transfer, but it is much simpler than sending or receiving foreign cheques. Of course there will still be fees, but you’re likely to get the money much quicker. It’s worth asking whoever is sending you money to consider this option to save both of you the hassle a cheque can bring.

Currency brokers

It’s possible to use a specialist currency broker to receive money from overseas. If you’re going to be getting payments regularly, it could be a good option for you. They’re generally able to get better exchange rates as well. You would need to coordinate with the person sending you the money because they’ll also need an account, but for recurring payments you’ll only need to set up an account once and then save time and money in future. However, there are often minimum sending limits

Foreign or offshore bank accounts

If you regularly receive money from someone in the same country, you might want to look into the option of opening a bank account in that country. It then takes the responsibility of sending the money from overseas away from whoever is sending you money and makes it yours, but gives you the flexibility to send it to the UK how and when you see fit, which could save you money in fees and exchange rates. You’d just need to give those account details to the sender and they can pay you directly.

Multi-currency or e-money accounts

In some countries it’s not always possible to open a bank account as a non-resident, so the above option could be trickier. But there are providers like Wise and Revolut that allow you to open accounts and hold money in multiple currencies. If you receive money from people in different countries, then these could be an option for you. You won’t be able to cash a cheque with them, but you’ll be able to share your account details with people to receive payment, then have full flexibility over that money. They usually have better exchange rates than the banks. For those running a business we have a guide on multicurrency business accounts.

Bottom line

It’s possible to cash a foreign cheque in your UK bank account, but not all banks offer it. Even if they do, it can take a while for the money to clear in your account and fees can be quite high. Bank of Scotland and HSBC’s Global Account don’t charge fees, though bank exchange rates are not usually that competitive.

If you can convince the sender to use an alternative option, you might both be better off doing so. That could be an international bank transfer, you opening a bank account overseas, a currency broker or opening a multi-currency account to receive overseas payments. We also have a seperate guide on depositing foreign currency into a UK bank account.

Written by

Jason Loewenthal

Senior writer

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Jason is a writer and editor. He worked as a senior subeditor for Finder for 5 years and in that time became familiar with a wide range of financial products and services. Before that, he worked for Australian Associated Press. He has a BA from Macquarie University in Australia. Jason loves to help other people find new ways to save money. See full bio