From now on, all cheques paid into UK bank accounts must be cleared within six working days. If a cheque is paid into a current account customers will be able to withdraw money within four days.
Meanwhile, interest on cheque deposits will now be paid after just two working days.
In the past, banks and building societies had used the time it takes cheques to clear to claw back some interest - much to the chagrin of customers - potentially saving them millions of pounds each year.
In addition, people who accepted cheques in payment for items they were selling or services they provided might only find out that the cheque had bounced, was stolen or was fraudulent weeks later, by which time the con merchant had vanished with the goods.
However, this new ruling means banks no longer have free rein to claim funds back long after issue and people who are reliant on cheque based transactions have much greater clarity and stability.
Of course the cynics will argue that this move has only been made as cheque use has slumped - around 4.9 million cheques were issued last year compared to 11 million in 1990.
However, for many, particularly small businesses, cheques remain important and this decision unquestionably gives them peace of mind.
It's also a neat reminder for customers who can now earn interest on cheques at a much faster rate to make sure they are picking up the best rate of interest they can.
Far too many customers continue to rely on bank accounts with minimal rates of interest because they feel the current account switching process is too complicated or they would simply rather not bother with the hassle of moving their money around.
However, with rates as high as 8% AER I would strongly advise you to take a look at what's available using our current account comparison tool. Don't offer unfounded loyalty to your bank if it is not willing to reward you with good rates.
The market-leading 8% rate is available from Abbey, but it's not alone in offering a substantial rate of interest.
If you're typically overdrawn on your current account then consider a deal that is tailor made for your needs. The Alliance & Leicester Premier Direct Current Account offers the market's best overdraft terms and it also includes an appealing 6.5% AER up to the first £2,500.
Other attractive offers include the 6.35% AER available from Coventry Building Society, which includes a 0.85% AER bonus payable in the first year.
The change in the banking code has certainly offered consumers a boost - now the onus is on you to ensure you're making the most of your money.
DISCLAIMER: Please note that any rates or deals mentioned in this article applied at the time of writing and may no longer be available/applicable today.
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