These old-school slips of paper still account for a ton of the money sent in Canada.
Despite the rapid expansion of e-transfers and digital banking, paper cheques remain surprisingly prevalent in Canada’s financial landscape. According to a report by Payments Canada, a non-profit banking oversight organization, cheques and other paper-based methods are utilized in only 3% of transactions but account for a significant 39% of the total money transferred by consumers and businesses.
Fortunately, converting these traditional paper cheques into cash for various purposes, whether it’s for purchasing new items or initiating a savvy investment strategy, is a straightforward process. Here’s how to do it:
To deposit a cheque, follow these simple steps:
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If you prefer traditional methods like walking into a bank for transactions, here’s what you can expect:
Upon arrival, a teller will review your cheque, ensuring all necessary details such as the payer’s information, cheque value, and your endorsement are in order. Subsequently, you’ll insert your debit card into a terminal and enter your PIN to grant access to your bank account.
Typically, the funds are available immediately, but there’s a chance you may need to wait if the bank opts to ensure everything is in order first.
Behind the scenes, banks take a couple of days to clear cheques before transferring the funds. Immediate access to funds essentially provides a good-faith advance until the clearance process is complete.
In cases where a bank holds a cheque until it clears, it’s mitigating the risk in case the issuer lacks sufficient funds in their account. Unfortunately, this may necessitate chasing the issuer for payment via a new cheque or, ideally, requesting a direct deposit to avoid potential bounce issues.
For in-person deposits under $1,500, the maximum hold time for funds is four days. However, for larger amounts, the wait period may extend up to seven days.
Most ATM machines are designed to accept endorsed cheques. Typically, you’ll need to use an ATM affiliated with your bank, although you may be able to use ATMs within your bank’s network with potential delays. It’s advisable to check with your bank beforehand.
To deposit a cheque at an ATM, follow these steps:
With modern technology, conducting banking transactions can be done without leaving your home. According to the Canadian Bankers Association, 23% of Canadians rely on mobile apps for most of their banking needs.
You can securely deposit your endorsed cheque while taking a break between YouTube videos. Simply open your bank’s mobile app, enter your mobile access PIN, select “deposit” from the menu, input the cheque amount, and choose the account for deposit.
The app will then request access to your device’s camera to capture photos of the front and back of the cheque. Afterward, write the date of deposit on the cheque and retain it for 30 days in case of any disputes or the need for re-submission, before securely disposing of it.
If you’re in a hurry for funds, consider requesting a certified cheque from the payer. Certified cheques guarantee the amount by the payer’s bank, ensuring immediate availability of funds.
It’s essential to deposit cheques promptly, as a cheque older than six months is considered stale-dated. While banks are not legally obligated to process stale-dated cheques, they may do so at their discretion.
Government of Canada cheques are exempt from deposit fees and stale-dated considerations. According to media reports in early 2020, approximately $1 billion in tax refunds and benefits remain unclaimed. Individuals are encouraged to check their Canada Revenue Agency accounts online or contact them by phone to inquire about any outstanding funds.
The Financial Consumer Agency of Canada actively monitors banks to ensure customer-friendly cheque-cashing policies. For instance, financial institutions are required to make the first $100 of every cheque available immediately.
Each rewards program offers unique redemption options, requiring thorough research to understand your choices. For instance, the American Express Membership Rewards program enables redemption of 1,000 points for a $10 statement credit, while Aeroplan allows points redemption for any available seat on Air Canada flights.
Cash back programs also have specific terms to consider. Some programs set a minimum cash back threshold for redemption, while others allow flexible redemption. However, certain cash back programs only distribute rewards annually.
Redeeming rewards is typically facilitated online or through mobile apps. It’s important to note that rewards often come with expiration dates, and accounts with no activity for 12 to 24 months may result in the loss of accumulated points or miles.
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