Can Canadians cash American cheques?

Canadians have a special relationship with their southern neighbours. Many Canadians have friends and relatives that live in the US and many others hold jobs or do business with companies that are based south of the border.

Things can get a bit tricky for both Canadians and Americans, however, when it comes to cross-border transactions.

The advent of electronic payment methods like PayPal and SWIFT transfers makes sending money to the US fairly straightforward. But there are still some instances where you might need to cash an American cheque if you do enough business with people in the US.

That raises the question: Can Canadians cash American cheques?

The short answer is yes, you can typically cash an American cheque in Canada, but only if you find a bank that supports foreign currency transactions. Thankfully, most major banks in Canada have partnerships with American financial institutions that make it possible for Canadians to cash cheques in US dollars. But you should always verify with your bank that they support US currency cheques before you accept one as payment.

Cashing foreign cheques—even those from the US—can be tricky in Canada. In this article, we’ll take a closer look at how this process works and what you should be aware of before you head to the bank.

Can you cash an American cheque at a Canadian bank?

If you’ve recently come into possession of an American cheque and you’re concerned that you won’t be able to cash it in Canada, we have good news for you: It is possible to cash US dollar cheques at most major Canadian banks.

Of course, we can’t speak to the specifics of every bank in Canada, so it’s up to you to verify with your financial institution that they accept US dollar cheques. But the vast majority of Canadian banks have partnerships with US financial institutions that allows them to process US dollar-denominated funds.

Many big banks in Canada even offer US dollar accounts for Canadian citizens and residents to simplify these cross-border transactions. In fact, there are even a few major Canadian banks that have a presence in the US, which makes them a popular choice for Canadian snowbirds who spend a sizable amount of time south of the border each year.

Again, it’s vital that you contact your bank before you accept a US dollar cheque as payment so you can confirm that you’ll be able to receive your funds. You should also be aware that most banks will only let you cash or deposit foreign cheques in-person with a bank teller, so you may not be able to use an ATM or mobile app for your transaction.

It’s best to get in touch with your bank before accepting payment in a foreign currency so you can learn more about how the transaction process will work.

How to cash an American cheque in Canada

Cashing an American cheque in Canada is typically a fairly straightforward affair once you confirm with your bank that they’re able to handle foreign currency transactions. The specific steps you’ll take will depend on your financial institution, but the process normally goes something like this:

1. Take your cheque to the bank – Most banks require that you cash or deposit foreign currency cheques in person for security purposes.

2. Ask to deposit a US dollar cheque – The bank teller likely has a system in place for handling foreign currency cheques, so it’s best to tell them what you want to do from the get-go.

3. Endorse your cheque – As is the case with Canadian cheques, you need to sign an American cheque before you can cash or deposit it. Some banks may also require that you show proof of ID for foreign currency transactions.

4. Confirm the exchange rate – Unless you have a US dollar chequing account at a Canadian bank, your US dollar cheque will need to be converted into Canadian dollars. The teller will ask you to confirm the exchange rate before they proceed with your transaction.

5. Deposit or cash your cheque – After you confirm the exchange rate on your transaction, the teller will deposit or cash your cheque according to your instructions.

Fees & processing times

As you can see, cashing and depositing American cheques in Canada is fairly similar to transacting with Canadian cheques.

Of course, there are a few differences, especially when it comes to finding a bank that’s willing to process such a transaction. You’ll also want to have a good idea of the current exchange rate between US and Canadian dollars so you can ensure that you’re getting a good deal from your bank.

But two things we haven’t discussed yet are fees and processing times.

We can’t talk about the specifics of every single bank in Canada, but some may charge a fee for depositing or cashing an American cheque. This fee may be built into the exchange rate (i.e., you’ll get a less-than-favourable rate on your exchange) or it might be a flat fee that’s deducted from the amount you’ll receive from your cheque. Always verify what fees you’ll be charged before you proceed with a transaction.

The other thing to keep in mind is that hold times on foreign currency cheques are different from hold times on Canadian dollar cheques.

In Canada, there are laws about how long financial institutions can hold your funds after you deposit or cash a cheque unless they suspect fraud. But these standard rules don’t apply to foreign currency cheques that are drawn from banks outside of Canada.

In fact, a financial institution can hold funds from a foreign cheque for 30 days or more! This can be a long time to wait if you need your funds for something urgent, so keep this in mind before you agree to accept a US cheque as payment.

Can you cash Canadian cheques at American banks?

Now that you’re an expert in all things US cheque-related in Canada, you might be wondering if you can cash a Canadian cheque in the US. Many Canadians spend all or part of the winter in the US, so dealing with these sorts of cross-border transactions isn’t out of the ordinary. (Fun fact: You can use your KOHO card outside of Canada, too!)

The answer? Maybe, but it all depends on which bank you use. You’ll also typically have an easier time depositing a Canadian cheque in the US than you will with cashing one.

There are some major US banks that are happy to deal with foreign currency cheques if you have an account with them. But smaller US banks and credit unions may not be equipped to deal with foreign currencies, so they won’t be able to help you out.

The good news is that there are a few Canadian banks that have a presence in the US. If you have a US bank account with one of these financial institutions, they’re normally more than happy to help you cash or deposit your Canadian cheque. But they may charge fees or apply long wait times to your transaction.

Be sure to contact your bank in advance to see whether or not they accept Canadian dollar cheques, what their fees are, and what you need to do in order to receive your funds.

How to cash a Canadian cheque in the US

If you’re familiar with the process of cashing or depositing a cheque in Canada, then you already know the basics of how this process works in the US. The exact steps that you’ll need to take in order to cash or deposit a Canadian cheque in the US will vary based on your financial institution, but the process is normally something like this:

1. Contact your bank – Not all American banks can handle foreign currencies. Contact your bank first to see what services they offer and how much they’ll cost.

2. Take your cheque to the bank – You will generally need to visit a bank branch in person to be able to cash or deposit a foreign cheque.

3. Ask to deposit a foreign cheque – US banks typically have specific protocols that they need to follow in order to process a foreign cheque, so let the teller know what you want to do at the start of your transaction.

4. Endorse your cheque – As is the case in Canada, you need to sign your cheque before you can cash or deposit it in the US. Some banks may also require that you show proof of ID for foreign currency transactions.

5. Confirm the exchange rate – Unless you happen to have a US bank account that supports foreign currencies (these are very rare), you will need to convert your Canadian dollar cheque to US dollars in order to process your transaction. The teller will ask you to confirm the exchange rate before they proceed with depositing or cashing your cheque.

6. Deposit or cash your cheque – After you confirm the exchange rate on your transaction, the teller will deposit or cash your cheque according to your instructions.

Fees & processing times

As is the case with depositing US cheques in Canada, depositing or cashing a Canadian cheque in the US can come with some fees and long hold times.

The fees for your transactions will vary so be sure to confirm them before you deposit or cash your cheque. Some banks have a flat-rate foreign transaction fee that they’ll charge while others will simply give you a not-so-good exchange rate. Just be sure that you know what fees you’re signing up for before you go ahead with your transaction.

Also, keep in mind that you might need to wait a few weeks for your cheque to clear at a US bank. In the US, banks must make the first $225 of a US dollar cheque available to you by the start of the next banking day unless they suspect fraud. The rest of the cheque should be available by the second banking day.

However, foreign currency cheques are not subject to the same requirements. It can take weeks or even months to process a Canadian cheque, but most banks will finalize your transaction within 3 weeks. If you need your money faster, you may want to consider a different payment method like a SWIFT transfer, instead.

Cashing foreign cheques in Canada: Possible, but not always easy

It is possible to cash and deposit US cheques in Canada. You can also typically cash Canadian cheques in the US. But dealing with foreign cheques isn’t always easy and your funds can be held up by the bank for weeks on end.

If you have a foreign currency cheque that you need to deposit in Canada, be sure to contact your bank directly to be sure that it's something they can help you with. Always ask questions about the fees and hold times you’ll be subject to for your transaction so you know what you’re getting yourself into and how long you’ll need to wait to access your money.