Financial Matters

Caution: Increased fees for cashing UK cheques

With the UK withdrawal from the Single European Payment Area, extra fees may be incurred for transfers and cashing of cheques

Austrian banks are charging higher handling fees to cashing UK cheques. While not all banks are even offering the service of cashing international cheques for customers, those that are may be charging substantially more since the UK’s departure from the EU, as it also left the Single European Payment Area, meaning that in addition to standard handling charges for counter service and costs of exchanging from Sterling into Euro there are now additional charges since 1 January 2021.

Some banks have already advised account holders about changes to services through letters and information in online banking services and apps. To give an impression of the potential impact, we recently learnt of a case of only €78 being credited to an Austrian account for a sterling cheque made out for a value of £100.

What alternatives exist?

Services like Revolut and Transferwise (other services also exist) offer accounts in Sterling and Euro, with the sterling account having a UK sort code, while the Euro account has an IBAN number. Most services are app-based and exchange rates are competitive and transaction charges considerably lower than international transfers from a UK bank to an Austrian one. (Note: such services do not necessarily constitute a replacement for a traditional bank account, and may not enjoy the same level of deposit guarantee coverage as a standard current account (Girokonto). In Austria coverage is up to € 100,000 per account holder per institution, with extra coverage for temporary high deposits (e.g. proceeds of a house sale, insurance pay-out, severance package).

We would also advise users to ask at their bank counter about the costs of such transactions in advance – costs of retail banking services must be displayed at bank premises or available via the bank’s website (required under law by Article 35 of the Austrian Banking Act (BWG; Bankwesengesetz).

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