In Australia, similar to other countries, cheques are in long-term decline. Until the1980s cheques were the main non-cash payment method. However, cheque use has dropped by 70% in Australia over the past ten years and is continuing to drop at a rapid annual rate. The main reason for this is that payment cards and other convenient electronic payment systems have taken over. Today, cheques account for less than 5% of all non-cash payments made by consumers and businesses each day.

Cheque processing and clearing

Cheques can be convenient in that the only information you need to make a payment is the name of the payee. As well, the payee does not need to have any special facilities or technology in place to accept them. However, because cheques need to be handled manually, they are expensive, and take longer, to process than cards and other electronic payments. Typically, a cheque will take three business days to clear. A diagram of how most cheques are processed is included in the FAQ section below. For more detailed information on cheques, contact your financial institution.

Financial institution cheques or "bank" cheques

Unlike the common belief, financial institution cheques are not exactly the same as cash and still need to be checked to ensure that they have not been stolen or altered in any way. It is recommended that businesses, such as car dealers, check with the issuing financial institution whether the cheque they receive is valid before handing over the purchased item. Some contact details are provided below.

  • Financial Institution Contact Details for Cheques - Download PDF

Check the Facts on Cheques (FAQ)

  • How are cheques processed?

  • Can I draw funds against a cheque immediately?

  • Why do cheques need to be cleared?

  • How long does it take for a cheque to be cleared?

  • What happens on each day of the cheque clearance cycle?

  • Why would a cheque be dishonoured?

  • Why would the payer stop payment on the cheque?

  • What if I need the funds sooner than the normal time it takes to clear the cheque?

  • Will I get the funds quicker if I ask for a financial institution cheque rather than a personal cheque?

  • Can I deposit a cheque that is made out to somebody else?

  • What can I do to reduce the chance of a cheque I have written being altered?

The material on this page is provided for general information purposes only. There may be some variations in practices depending on your financial institution.