Cashing a cheque: know your rights

From: Financial Consumer Agency of Canada

Your rights when cashing a Government of Canada cheque

Cashing your emergency benefits-related cheque

The Government of Canada has temporarily increased the cheque-cashing limit to $2,000 for emergency benefits-related cheques to individuals.

You may cash a Government of Canada cheque:

  • for free at any bank
  • at a bank where you’re not a customer, if:
    • the cheque is for $1,750 or less, and
    • you show acceptable identification 

Learn more about the types of identification you need to cash a Government of Canada cheque.

When a bank won’t cash your Government of Canada cheque

A bank may refuse to cash a Government of Canada cheque if:

  • there’s evidence that the cheque was altered or is counterfeit 
  • the cheque is for more than $1,750 (if you’re not a customer of this bank)
  • it has reasonable grounds to believe that there has been illegal or fraudulent activity in relation to the cheque

If the bank won’t cash your cheque, they must inform you in writing. 

They must also disclose to you: 

  • their procedure for dealing with complaints
  • the name of the external complaints body (ECB) of which they’re a member and how to contact that ECB
  • the Financial Consumer Agency of Canada’s mailing address, website address and telephone number

Cheque hold periods and your right to access funds

By law, federally regulated financial institutions must limit the hold period for funds you deposit by cheque. This applies to cheques that you or an eligible enterprise (small- and medium-sized business) deposit. 

For this law to apply, the cheque must be:

  • in Canadian dollars 
  • drawn on an account from a federally regulated financial institution’s branch in Canada
  • paper-based
  • encoded with magnetic ink to allow for character recognition
  • undamaged or unmutilated so that it's readable by a cheque-clearing processing system 

Maximum cheque hold periods

Subject to exceptions, the maximum cheque hold periods are:

Table 1: Maximum cheque hold periods
Amount of cheque Deposit method
In person (with an employee at a branch or point of service) Any other way (such as at an automated teller machine (ATM))
$1,500 or less 4 business days 5 business days
More than $1,500 7 business days 8 business days

Note: The maximum cheque hold periods in the table above don’t include the day you deposit the cheque. There may also be more delays. For example, if the cheque is from an account in another province or country, it may take longer. 

A cheque may have to be returned to your financial institution. For example, because of non-sufficient funds, a closed account or a stop payment. If so, your bank will remove the funds from your account. This can happen even after the maximum hold period on a cheque has expired

Access to the first $100

Federally regulated financial institutions must make the first $100 of the funds you deposit by cheque available for withdrawal. If the cheque is for $100 or less, they must make the whole amount available to you. 

The first $100 must be available to you:

  • immediately, if you deposit the cheque in person with an employee at one of the financial institution’s branches or points of service.  
  • on the business day following the day of the deposit, if you deposit the cheque in any other manner, such as at an ATM 

Exceptions to the maximum cheque hold period and access to the first $100

The maximum cheque hold periods and access to the first $100 don’t apply if the:

  • account is open for less than 90 days 
  • cheque is endorsed more than once 
  • cheque is more than 6 months old 
  • cheque isn’t in Canadian dollars 
  • financial institution has reasonable grounds to believe that the cheque was made for illegal or fraudulent purposes in relation to the account 

Exceptions specific to small and medium-sized businesses

Maximum cheque hold periods may not apply to cheques deposited by small- and medium-sized businesses that have:

  • a negative change in credit score or other behaviour scores that may impact the enterprise’s credit risk  
  • an escalating overdraft balance that isn’t being reduced by deposits received 
  • an unexplained change in the history of cheques being deposited into the account 
  • high numbers of cheques returned as dishonoured cheques from other institutions. This may impact the available balance in the account 
  • a notice of bankruptcy or of creditor action against the enterprise 

Access to the first $100 doesn’t apply to cheques deposited by small and medium-sized businesses. 

In legislation the term eligible enterprises is used to refer to small- and medium-sized businesses that have: 

  • authorized credit of less than $1 million 

  • annual revenues of less than $50 million 

  • less than 500 employees 

Your right to information about cheque hold policies

When you open a personal bank account, a federally regulated financial institution must provide you with a written copy of their cheque hold policy. This may be in your account agreement or in a separate document you receive with it.  

They must provide the policy in writing, upon request, and display it prominently:

  • at each of their branches where they offer products or services in Canada and at each of their points of service 
  • on each of their websites through which they offer products or services in Canada 

Refusal to honour cheque hold periods or access to funds

All federally regulated financial institutions must give you a written notice if:

  • they refuse to honour the maximum cheque hold periods 
  • they won’t give you the first $100 of funds you deposit because of any exception noted above  

If you’re dealing with a bank, they must also disclose to you: 

  • their procedure for dealing with complaints 
  • the name of the external complaints body (ECB) of which they’re a member and how to contact that ECB 
  • the Financial Consumer Agency of Canada’s mailing address, website address and telephone number 

If you’re dealing with a federally regulated financial institutions other than a bank, they must tell you how to contact the Financial Consumer Agency of Canada to file a complaint. 

Changes to cheque hold policies

Federally regulated financial institutions may make changes to their cheque hold policy. If they do so, they must disclose the changes to their customers and to the public at least 60 days before they apply.  

They must provide the information in writing upon request and display it prominently: 

  • at each of their branches in Canada where they offer products or services and at each of their points of service 
  • on each of their websites through which they offer products or services in Canada 

If you have a deposit account and you receive an account statement, they must inform you of the changes at least 30 days before they apply. 

When these rights apply to you

These rights apply when you’re dealing with a federally regulated financial institution like a bank or federal credit union. 

Find out if your financial institution is federally regulated

Learn more about how your banking rights are protected

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