Do International Checks Work? How to Cash or Deposit One

International checks can be confusing. While technically possible to process, the procedure is not as straightforward as handling domestic checks. This process involves specific considerations that differ significantly from typical local banking transactions.

Types of International Checks and Key Features

An international check is drawn on a bank account in a country different from where it is being deposited, often in a foreign currency. Common types include:
Personal checks: Issued directly from an individual’s account.
Cashier’s checks: Guaranteed by the issuing bank, with funds withdrawn upfront.
Bank drafts: Similar to cashier’s checks, issued by a foreign bank in a foreign currency.
Money orders: Prepaid instruments for specific amounts, offering a paper trail.

International checks display the currency and amount in numerical and written form. They also state the issuing bank’s name and address, the payee’s name, and the drawer’s signature. Bank codes like SWIFT/BIC (Society for Worldwide Interbank Financial Telecommunication / Bank Identifier Code) are crucial for routing international transactions. SWIFT codes identify specific banks globally for cross-border transfers. For checks from European countries, an International Bank Account Number (IBAN) may also be present, identifying the recipient’s bank account.

Process for Cashing or Depositing International Checks

Cashing or depositing an international check involves specific actions distinct from domestic processes. The primary location for such a transaction is your own bank or a financial institution offering international services. Many banks require an in-person visit for foreign check deposits, as mobile deposit options are not available for these items.

Upon presenting the check, you must endorse it by signing the back. Banks require proper identification, such as a government-issued ID. You may be asked to complete specific bank forms for foreign currency deposits or collection items. The bank then sends the check for “collection,” forwarding the physical check to the issuing foreign bank for verification and payment through correspondent banks. After submission, you should receive a receipt or confirmation that the collection process has begun.

Factors Affecting International Check Processing

Several factors influence the processing of international checks, leading to longer timelines and additional costs. International checks take significantly longer to clear than domestic checks, often ranging from several weeks to a few months. This extended duration is due to the complex collection process, involving physical mailing and multiple verification steps across different banking systems. Some foreign items can take three to six months to be returned, depending on the currency and bank.

Associated costs include collection fees for processing foreign checks, which can be a flat fee or a percentage of the check’s value. Foreign exchange fees or markups are applied during currency conversion. Banks use an exchange rate less favorable than the mid-market rate. Funds from international checks are also subject to extended holds until the check fully clears.

Alternatives to International Checks

Given the complexities and delays of international checks, more efficient alternatives exist for sending or receiving money across borders. Wire transfers are a widely used option, offering speed and reliability. These electronic transfers clear within one to five business days. Wire transfer fees range from $15 to $50 for international transfers, depending on the bank and amount.

Online money transfer services provide another convenient and often more cost-effective solution. Companies like PayPal, Wise, Remitly, WorldRemit, and Xe facilitate international transfers with lower fees and faster processing times. Many offer transparent fees and competitive exchange rates, often using the mid-market rate. International bank transfers, such as those utilizing the SWIFT network or International ACH (Automated Clearing House) transfers, are also viable for direct bank-to-bank movements. SWIFT is a global network for international wire transfers, while International ACH moves money from U.S. bank accounts to foreign accounts, though its availability is limited to certain countries.