Explore the Different Types of Cheques in India

Bearer cheques are the most common among all bank cheque types. Cheques marked with the words ‘or bearer’ can be encashed by the person presenting it to the bank. It requires no further authorisation or identification of the payee, making it a high-risk cheque if lost or stolen.

A cheque without specific details, extremely risky if lost or stolen, potentially enabling misuse. A blank account can be identified by, living black spec in the amount column and must be signed by the drawer. An Account Payee Cheque is a secured type of cheque that ensures that the amount is thoughtfully issued to the payee account. It is one of the most secured and most commonly used cheque that enable the payee that they get the amount in any matter that it is displayed in the leaf. Account Payee Cheque can be identified by, a name account payee written on the top-left corner of the cheque.

This digital process happens through a system that banks use to exchange cheques. By doing this, there’s no need to move the paper cheque around. Also, it speeds up the time it takes for the cheque to get processed.

In this column, we will discuss the top 11 types of cheques in India. A crossed cheque is a type of cheque where the issuer makes two slanted parallel lines on the top left corner of the cheque, with the word ‘a/c payee’ written. A crossed cheque is also safer because it can be cashed types of cheque in india only at the payee’s bank. There are several types of financial instruments that can be used for payment, including cash, checks, credit and debit cards, electronic transfers, and digital currencies. Cash is the most commonly used form of payment, but it can be easily lost or stolen. Cheques, which are written orders to pay a specific amount from an account, can be used to pay bills or withdraw cash.

A crossed cheque is recognizable by two parallel lines across the cheque, it is payable only through a bank, ensuring added security. When the date mentioned in the date column along with the payee name of order or bearer cheque is earlier than the current date then it is called antedated cheque. Antedated cheque is valid up to 3 months from the date mentioned in the date column of the cheque. It is a prepaid instrument issued by a bank, ensuring that the payment is guaranteed. This makes it a reliable option for secure transactions between parties. Business cheques, primarily used for commercial transactions, facilitate payments between companies and individuals.

Different types of cheques

Contradictory to the bearer cheques, order cheques are payable only to the mentioned party on the cheque. The words ‘or bearer’ are struck out, enhancing control and security over fund transfers. The bank is liable to check and authenticate the cheque bearer’s identity before releasing the payment of an order cheque. The payee has to endorse the cheque by signing it on the back of the cheque while presenting it. One can conduct secure and safe financial transactions using a cheque as a payment mode. A cheque eliminates the risk of a physical transfer by enabling one to send a large sum of funds from one bank account to another.

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• To ensure that it is an account payee cheque, two lines are made on the left top corner of the cheque, labelling it for “A/C PAYEE”.
• A cheque is a common method of money transfer among merchants and small businesses.
• This comprehensive guide explains the different types of cheques, their basic features, their validity, and the intricacies of using them.

For students, cheques are useful for fee payments and bank account verification. Write “Self” in the payee field if you’re withdrawing cash from your own account. This is valid only if you, the account holder, are presenting the cheque. A post-dated cheque is processed only on or after the future date mentioned on the cheque. Truncation is a medium of stopping a paper cheque from going all the way to the bank that would disburse the money. Through this, a digital picture of it is sent to the bank, in place of the paper cheque.

• Online mode – You can log into your net banking account and navigate to the services section to request a new chequebook. After paying the required amount, you will receive it at your registered mailing address. If you are an IDFC FIRST Bank account holder, new chequebook issuance is completely free of charge. • Cheques are issued only to account holders, so anyone who wishes to use cheques first must open a bank account.

Can I cash my cheque at any bank branch?

Business cheques are typically issued by companies and include the business name, address, and account details. They require authorised signatures from company officials, ensuring accountability. These cheques can be used for a variety of transactions, such as paying suppliers, employees, and service providers.

Special Crossing

It may be difficult to encash or read a mutilated cheque and can require a re-issue. Additionally, banks may require you to re-verify and complete some other formalities in case of severe damage. Such cheques are issued by the bank itself and guarantee payment. It is considered the safest type of cheque and is also known as a crossed cheque. The contents of this article/infographic/picture/video are meant solely for information purposes.

• It is not a substitute for specific advice in your own circumstances.
• It is usually best to place it on the top left of the cheque.
• In some countries, the bank will return the cheque to the payee as “stale cheque” or “expired cheque” with a reason.
• When the cheque is not crossed on the top right corner of the cheque the cheque is called open cheque.
• One of the benefits of the cheque is that you can transfer a high-value transaction without any hassle which would be very difficult if hard cash was used instead.

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Please consult your financial advisor before making any financial decision. There are certain situations in which the bank may refuse to process the cheque payments, such as those mentioned below. The payee is the person who receives the payment from the cheque-holder through the drawee bank. To find the cheque number, you can look at the bottom left corner of your cheque leaf.

If a cheque is not presented to the bank within 3 months after it has been issued, it no longer remains valid and hence is said to have turned ‘stale’. Ante-dated cheques are back-dated cheques wherein the withdrawal date is in the past, but the cheques are presented after that period. After the advent of electronic modes of payment today in India, cheques are still very much in use given their flexibility for back-dated payments among other benefits. If you are preparing for any public sector banking examination such as IBPS PO 2019 or RBI Grade B 2019 or any other, your knowledge regarding banking must remain updated. An order cheque is payable to a specified person whose name is on the cheque. Ante-dated cheque refers to that cheque which has in it a date earlier than the date on which it is presented to the bank.

Currently, a cheque is considered valid until three months from its issued date. A post-dated cheque bears a date later than the date it was issued on. 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. A cheque is a paper instrument that orders the bank to transfer money from the sender’s account to another account. It is issued to a current or savings account holder to conveniently transfer money within and outside the bank.

The amount of money that needs to be transferred, payee’s name, date and signature of the drawer are all mentioned in a cheque. Crossed cheques can be endorsed to other individuals even if their names may not be on the cheque. When the word ‘’bearer’’ is canceled and the word ‘’order’’ is written in its place, the cheque is called Order Cheques. It can only be issued by a person whose name is mentioned on the cheque. They don’t do any investigation to authenticate the cheque bearer’s identity before making the payment.

What is the difference between a payee and a drawee?

An open cheque can be cashed at either of the banks, namely, the payer’s bank or the payee’s bank. Also, an open cheque is transferable by the payee, which means they can make someone else the payee. The issuer of the open cheque is required to sign on both the front and back of the cheque. The person who writes the cheque is called the “drawer” and the person in whose name the cheque has been issued is called the “payee”.