Cashing Checks From Abroad

Receiving a foreign check from abroad can bring on a certain panic if you never anticipated the problem. The scenario could come up for several reasons, from being paid by someone overseas or because you’re repatriating funds, but they can often be solved in a similar fashion.

Checks are already viewed as being outdated by many people, so even cashing a domestic check in is seen as a chore. However, beyond the effort required, cashing a foreign check can be either costly, inconvenient, or completely untenable.

There’s nothing more frustrating than having a bunch of money in your hand that you cannot use. So, here is a guide to cashing foreign checks – in particular how to cash dollar checks in the UK – but also covering the problems and solutions of a check from any country.

The cost of cashing foreign checks

If you’re in the UK, for example, and you have a check from the U.S government due to a tax return, then it may be possible you can cash it with a UK bank. However, it would come at a cost. UK banks often charge around 5% of the check’s value when. So, a $1,000 rebate would lose around $50 instantly.

How long does it take to cash a check?

So, that process of using a high street bank will not only cost you a hefty fee but it will also take a long time to clear. The best you can hope for is usually between 6 and 7 days. However, if the clearing process is unsuccessful, it may take up to 6 weeks for the check to finally clear. This could be a massive inconvenience to your cash flow if you depend on this money.

Banks will sometimes decline

There are actually only a handful of international banks that will actually accept a US check – and this is the world’s reserve currency. If you’re residing in the developing world, or have a check from a non-Euro, non-USD entity, then the odds of your check clearing through the use of a high street bank is looking very slim.

Mobile deposits

One potential way that you could reduce the impact of national borders is through using a bank that allows deposits using your phone (i.e. taking a picture of the front and back). This doesn’t solve the problem entirely, as you may still have a check that isn’t compatible with your bank, but it would be useful for a European who now lives in Asia to continue cashing their Euro checks. Ideally, a challenger bank may offer the lowest fees, but they are less likely to be able to cash a totally foreign check.

How to cash US checks abroad

There is a way out of this, but it does require a little extra effort. Money transfer companies are essentially FX specialists that are designed to break down national borders and offer fiercely competitive exchange rates. However, having a multi-currency account isn’t enough, as most companies will not accept checks if they’re made in the name of their clients.

So, the solution is to change the check’s recipient name to the name of the company that you’re dealing with, like TorFX or MoneyCorp. In this instance, your foreign exchange provider can cash the check instantly and for extremely low fees. This will be the fastest way to cash in a check, and the cheapest, but it will depend on the name used on the check.

Furthermore, you’re already at an advantage if it’s a US check, because pretty much every FX specialist will handle USD. So, this is definitely how to cash IRS checks abroad. If your check is from a country that uses a very exotic currency with low market cap, then your odds may drop, but a FX specialist will no doubt remain the best way to cash a check abroad.

Receiving money from abroad

If your issue is not with a check and is instead simply receiving funds from abroad, such as invoices, then the dynamic remains the same as above. Some high street banks will accept this foreign currency, but the transfer may take several days to receive and it may cost you (and the sender) up to 5% in fees – both in fixed fees and a poor exchange rate. Whilst it’s semi-understandable with cashing a check, it’s quite remarkable the same issue arises when simply receiving digital transfers of money.

Like with the check solution, FX specialists are the way to go. However, unlike with cashing checks, the process is instant and more seamless – no name changes are required! In fact, you can set up multiple foreign accounts under the same account, which creates virtual details in the foreign country that you’re receiving money from. This makes it much easier for the sender, as they’re essentially sending it to a domestic recipient now – both the format will be familiar and the cost will be lower.

This allows you, the recipient, to take control of the exchange. You can keep the foreign currency if the market is turbulent, or exchange it as and when you feel like in a matter of seconds. Generally, a currency exchange should cost under 1% – way below the potential 3-5% from a bank.

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