What is Cheque? Understand 10 Different Types of Cheques

In this article meaning of the cheque, the types of cheques, Features of the cheque are included. Crossing and Bouncing of Cheques both are separate concept. The words ‘not negotiable’ when added to a cheque turns it into a not negotiable crossing cheque. The words make the cheque not transferable to any third party. If a cheque is dishonoured, it can be reissued if the payment details are corrected and the recipient is willing to accept it again.

1. • Several bank digital kiosks also process cheque transactions digitally so, you don’t require to visit the bank always.
2. When you receive a crossed cheque, you must deposit it into your bank account.
3. In the leaf, it is a must to include the word ‘bearer’ to process this type of cheque.
4. The drawee is usually indicated on the face of the cheque by its name and address.
5. A post-dated cheque is an account payee or crossed cheque that has a future date in order to meet a financial obligation in future.

A cheque is a document that tells your bank to transfer the mentioned amount to a person or organisation. There are mainly ten types of cheques in India that you should know about. A special crossed cheque has the name of a specific bank between the two parallel lines.

Personal Finance

A cheque is a common method of money transfer among merchants and small businesses. A cheque is a document that orders a bank to pay a certain amount of money from a person’s account to another person or company’s account. It is a convenient and secure way to make payments, as it eliminates the need for cash.

Crossing of cheques

There are various types of cheques, each with its own unique features and purposes. These include bearer cheques, order cheques, crossed cheques, account payee cheques, post-dated cheques, stale cheques, and more. Understanding the different types of cheques is essential for effective financial management and banking transactions. The cheque is used to make safe, secure, and convenient payments. It is a safe option because no hard cash is involved in the transaction; thus, the risk of loss or theft is reduced.

It means that only the individual whose name is mentioned as the payee can receive the specified sum of money. In this case, the bank does not check the bearer’s identity before making the payment. An open cheque does not have any crossing marks on its face and is generally issued to the bearer. types of cheque in india The bearer holds the authority to redeem the cheque or simply cash it. Therefore, it is not a safe means of making a transaction, when compared to a crossed cheque.

What is Crossing of a Cheque?

It becomes useful when you are heading on a foreign trip and do not wish to carry too much cash. Like regular cheques, crossed cheques also have an expiration date. Make sure to deposit them before the date mentioned to avoid any inconvenience.

1. Post-dated cheques are the cheques where the date present is later than the original date that the cheque was issued.
2. The money is held in a new bank account (also known as a cheque, current, chequing, checking, or share draught account) by the person who writes the cheque.
3. The drawer and payee may, in some circumstances (such as when the drawer makes a self-cheque), be the same person.
4. The information is subject to updation, completion, revision, verification and amendment and the same may change materially.
5. The drawee is the bank or financial institution that the cheque is drawn on, which must pay the amount of the cheque when it is presented for payment.

It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision. The drawer or the cheque holder has the authority to sign the cheque. An individual impersonating the cheque owner’s sign is considered an offender under the law.

• Similarly, the amount mentioned on the cheque cannot be altered.

It is also considered the safest form of crossing and is widely used in the market. In general crossing cheques, there is the presence of two parallel lines present on the top corner of the document. Bearer cheques are the most common types of cheques seen around the globe. In such cheques, the bearer of the cheque is allowed to encash the cheque at banks or other financial institutions. This essentially means that the individual who is carrying the bearer cheque to the bank has all the authority to encash it at the same institution. A bearer cheque is the type of cheque that allows the person bearing or carrying the cheque to the bank to receive the payment specified on the cheque.

A cheque older than 6 months is called a stale cheque however, they are still valid and can be used for transactions. A post-dated cheque bears a date later than the date it was issued on. It can only be cashed after the date specified by the payer. The post-dated cheque can be valid after the mentioned date but not before it. Hence, even if it is presented to the bank, the bank will not process it until the mentioned date. This protects the issuer of the cheque as the amount can only be credited to the bank account of either the named payee or an endorsee.

A cheque can be drawn on either a current or a savings account. A cheque number, MICR code, and IFSC code are printed on every bank check. The on-track motion of money through a written paper source is facilitated by the cheque method of fund payment, which involves three parties. There are various types of cheques, including bearer cheques, order cheques, crossed cheques, account payee cheques, post-dated cheques, ante-dated cheques, traveler’s cheques, and more. Each type of cheque has its own specific characteristics and purposes.