Clear

In the context of banking and financial transactions, "clear" refers to the process of completing the payment of a check. This involves the collection of funds from the account on which the check is drawn and transferring those funds to the account of the individual or entity who deposited the check.

The clearing process starts when a check is deposited into a recipient's bank account. The recipient's bank then presents the check to the payer's bank for payment. The payer's bank verifies the availability of funds in the payer’s account and, if the funds are sufficient, authorizes the transfer of the specified amount to the recipient's bank. Once the funds have been successfully transferred and credited to the recipient's account, the check is considered to have "cleared."

Clearing is a critical function in the banking sector as it ensures the orderly transfer of funds between accounts based on the instructions provided by account holders via checks. The duration it takes for a check to clear can vary depending on the banks involved and the specific arrangements between them, which can influence the speed at which the funds become available to the recipient.