GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

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Cheque Clearing


Synonyms:cashed, cleared, deposited, honoured
Filed Under: financial-banking
Tags: bank account, banking
 

Definition of cheque clearing

cheque clearing
1. 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."

Related Terms and Acronyms:

  • cheque (CK)   A written order for payment of a certain amount of money.
      ➥  Bank account transaction code.
  • cheque hold   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   Cheques that are cancelled are returned to the account holder in a monthly statement.
  • insufficient funds (ISF)   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).
  • overdraft minimum amount   Minimum amount that will be transferred to the accountholder's account if a potential non-sufficient funds (NSF) situation occurs.
  • overdraft protection   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   One who makes a payment to another party.
  • personal consumption spending   What households collectively spend on goods and services.
  • personalized cheque   A cheque which has your name and account number printed on it.
  • settlement points   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.

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