- You write a cheque to pay your telephone bill. The telephone company sends the cheque to its bank to be deposited in its account. The cheque winds its way through the system and, eventually, your account is debited for the amount of the cheque. When that happens, the cheque is said to have "cleared."
cleared, honoured, deposited, cashed
Related Terms and Acronyms
- Certified Cheque (CC) — Acronym,
➥ Bank account transaction code.
- A cheque that a bank guarantees will clear.
- Cheque (CK) — Acronym,
➥ Bank account transaction code.
- A written order for payment of a certain amount of money.
- Cheque Hold — Definition,
- The length of time that a financial institution can legally hold a cheque before crediting a customer's account balance and allowing the customer to use the funds.
- Cheques Returned with Statement — Definition,
- Cheques that are cancelled are returned to the account holder in a monthly statement.
- Debit — Definition,
- Another name for withdrawal of funds from your account.
- Direct Cheque Printers — Definition,
- These operations offer lower prices and greater selection than chequing customers get through their banks. Many of these printers are also printing cheques for banks that use outside printers. Customers must supply most direct cheque companies with a voided cheque or a reorder form from a current batch of cheques and a deposit slip. Names and addresses must match with information on file at the account holder's bank.
- Float — Definition,
- The amount of time the bank takes to clear or reject a cheque for payment
- The time at which funds are debited from the issuer's account.
- Insufficient Funds (ISF) — Acronym,
- When funds are not enough to satisfy the payment of a cheque or draft made on that account; also known as non-sufficient funds (NSF).
- NSF Cheque — Definition,
- If a cheque is returned for this reason, it means that there was not enough money in your bank account to cover the amount of the cheque. There is a fee to you if this situation occurs.
- Onus Item — Definition,
- A payment that is deposited at the same financial institution in which it was drawn or written. For example, a cheque that is written by one bank customer and deposited by the recipient at another branch of the same bank. These items are not cleared between institutions and therefore are not represented in statistics of payments exchanged between financial institutions in the clearings.
- Overdraft Minimum Amount — Definition,
- Minimum amount that will be transferred to the accountholder's account if a potential non-sufficient funds (NSF) situation occurs.
- Overdraft Protection — Definition,
- A service that allows a chequing account to be linked to another savings or line of credit to provide protection against insufficient funds or overdrafts.
- Payor — Definition,
- One who makes a payment to another party.
- Personal Consumption Spending — Definition,
- What households collectively spend on goods and services.
- Personalized Cheque — Definition,
- A cheque which has your name and account number printed on it.
- Settlement Points — Definition,
- Regional collection points in the clearing and settlement system operated by the Canadian Payments Association. Settlement points forward each bank's regional balance to the Bank of Canada in Ottawa at the end of each day to allow the central bank to adjust the banks' balances with the central bank.