What to do with a cheque in USD?

caileag

With any luck, I will shortly receive a cheque for around $4000 USD. I have no US bank accounts or other financial links to US, so will require to cash the cheque in the UK.

Does anyone know the best way to do this? Is it best just to pay it into my standard bank account, or are there better value routes?

I have accounts with RBS, Santander, TSB etc - are the all a muchness when it comes to costs?

Thanks!

Caileag

Aquamania

Is there no way you can get them to wire the money to you?

A US cheque will take weeks, probably months to clear.

xylophone

Can the sender not convert the dollars to sterling in the US and remit in sterling?

caileag

Thanks for the suggestions - however, the sender is the State of New York (local government department) so I have no option but to accept a cheque.

I do have family in NY who could potentially help out - but I doubt they can open an account in my name, or pay it into one of their own?

So I think the problem remains - how can I best cash this cheque?

henm2

If you receive a cheque either of your banks can process it.
The two alternative transaction methods are 'negotiation' -they buy it off you and give you value for it in terms of the sterling equivalent using their $ to £ buying exchange rate less a commssion charge. Your account is credited quickly but if the cheque bounces (there is no cut off or clearance time for this) your account will be debited again. Banks will usually only use the 'negotiation' method for relatively small amounts. (that 'small amount' figure varies from bank to bank, customer to customer)

The more likely method in your case as the cheque is large is on a 'collection' basis. The UK bank collects the proceeds of the cheque from the drawee bank (US paying bank). The US bank sends the proceeds as $ less their charges and your bank also makes a charge. The exchange rate used by the UK bank is the going $ £ buying rate at the time the proceeds are received. This process takes aprox 6 weeks but once the proceeds are received you know you have definitely been paid with no possibility of the funds being reclaimed back again.

caileag

Thanks henm2, I'd seen mention of thpse terms but not really understood them!

Sounds like my best (or only) option is just to pick a bank where I have an account, pay my fees then sit and wait - still, having waited this long, 6 more weeks is nothing!

Graham1

Citibank in London will clear a USD cheque in 14 working days if you open a USD current account with them. They'll charge £5 however plus account maintenance fees (no maintenance fees if you have sufficient other account(s) with them). So, probably not worth it for a one-off cheque.

Westie983

with cashing a foreign cheque into a UK bank account, its is accepted and sent to clearing, where they ask the US Bank for the funds, then converted into £, the fee is then taken from the amount (the fee is explained on the back of the forms, dependant on what category the total amount falls into) the remaining money is paid into your UK account.

Where I work the form explains the process and that the cheque could take up to 31 days to be credited as this covers any issues with the conversion and processing time zones, but it doesn't take 6 weeks and most of the time if there is no issues the funds are credited inline with other cheques which is 5 working days... but could take 31 days as a back up....

I cant speak for other banks but thats how LBG work :-)

k12479

caileag wrote: »

I do have family in NY who could potentially help out...

You could potentially endorse it to them and have them wire the money to you, but it may end up being more hassle if it isn't accepted: http://www.wikihow.com/Endorse-a-Check

henm2

For a good quide re clearance of foreign cheques and making and receiving payments abroad see this http://www.chequeandcredit.co.uk/resources/faqs/cross-border_foreign_cheques/

caileag

Thanks Henm2, a good resource there.