Business Day 1: On the day you deposit a cheque your financial institution credits your account with the amount of the cheque. It then transmits an electronic image of the cheque and transmits payment details electronically overnight to the payer’s financial institution, which in turn debits the amount of the cheque from the payer’s account.
Business Day 2: The payer’s financial institution checks amongst other things that there are sufficient funds in the payer’s account to cover the cheque. If the cheque is dishonoured, the payer’s account is reimbursed with the funds debited on Day 1 and the funds that were credited to your account on Day 1 are reversed.
Business Day 3: Providing the cheque was not dishonoured on Business Day 2, the cheque is cleared, and you have access to the funds credited to your account on Day 1. If the cheque was dishonoured on Day 2, your financial institution will advise you of the reason.