What is Cheque? Understand 10 Different Types of Cheques
There are numerous features of Bank Cheques an individual must be careful about. Here, we have listed some pointers through which you can understand more about this payment mode. If the respective drawer signifies a date prior to the current date on a cheque, it is considered to be a Ante Dated Cheque.
Bearer Cheque or open Cheque
A self-cheque is written by the account holder to withdraw money personally from their own account at their bank branch. When the account holder writes a self-cheque to pay self to receive the money physically from the bank branch where he/she holds his/her account. A stale cheque refers to a cheque which is past its validity period and can no longer be encashed.
The cheque number is used to find the status of a cheque. To find the cheque number, you can look at the first six numbers that are present on the bottom of the cheque. If the necessary information on a cheque is torn or not visible, the cheque becomes void. If a person does not want their cheque to be endorsable, they can strike off the “OR BEARER” option mentioned in the cheque. Further below each type of cheque has been discussed in detail for candidates to study and prepare themselves for the upcoming Government exams.
To cancel a cheque, draw two parallel lines across the cheque and write “CANCELLED” between them. This prevents the cheque from being used for a transaction. • Mobile app – Like net banking, you can also use your mobile banking app to apply for a new chequebook. The process is similar to net banking and consumes hardly a couple of minutes. Yes, Bank Cheques are considered to be one of the most sought-after money-transferring tools in today’s modern world. A Bearer cheque is the cheque which is payable to the bearer of the cheque or whose name is written on the cheque.
UPI by Banks
- An order cheque is specifically in favour of a particular individual or organisation.
- They provide an easy means of paying ‘ready cash’ and spare people from carrying bulk cash when visiting a foreign country.
- To cancel a cheque, draw two parallel lines across the cheque and write “CANCELLED” between them.
- Electronic transfers, such as wire transfers and ACH transactions, enable the transfer of funds between accounts.
- An open cheque can be cashed at either of the banks, namely, the payer’s bank or the payee’s bank.
For instance, cash is the most preferred mode to make immediate payments. For payments that can be accepted at a later date, people accept cheques. A cheque guarantees the payment of the amount to the bearer. While writing a cheque – date, amount, signature of the account holder and the name of the beneficiary are necessary in order to initiate the payment by the bank. If any of the information is written wrong, the bank will not accept your cheque. The drawer uses this type of cheque to withdraw cash from the personal account or transfer money from one account to another within the same bank.
Bank Cheques, Different type of Cheques
That is why these cheques are not considered to be secure. When a bank doesn’t deposit the payment that is written on the cheque into the payee’s account, it is known as cheque dishonour. A ‘cheque Return Memo,’ which outlines the reasons for the cheque being dishonoured, is normally issued to the payee’s bank. The payee’s bank presents the dishonoured cheque and memo to the payee.
They are mostly used for transactions between known parties where there is trust between them. A bearer cheque is a type of cheque in which the holder of the cheque has the right types of cheque in india to receive the payment. The person who presents the cheque to the bank for payment will receive the funds, regardless of who the cheque is made out to.
There are certain situations in which the bank may refuse to process the cheque payments, such as those mentioned below. • With a unique number assigned to every cheque leaf, they are easier to track down if lost. A bearer cheque allows payment to the individual carrying the cheque without the need of any authorization. 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. The validity of the cheque is up to 3 months from the date of the cheque.
Account Balance by Bank
It is used by the issuer to withdraw money from their bank account. A stale cheque has already passed its validity date and can no longer be cashed. Currently, a cheque is considered valid until three months from its issued date.
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The purpose of a cheque, which is a negotiable instrument, is to ensure smooth monetary transactions as per the required specifications. Today, cash is the widely used method of payment, but if somebody has to make the payment on future date then the cheque is the best payment method. Based on different factors, we have different types of cheques. Cheques come in different forms, each with its own unique purpose and features. It is important to choose the right type of cheque for the intended transaction to ensure that the payment is processed smoothly and securely.
It is valid for the tenure of three months from the date of issuance. A bearer cheque is one in which the payment is paid to someone acting on behalf of the payee/beneficiary for whom the cheque was issued. In order to process this type of cheque – the word ‘carrier’ must be included in the leaf. This is the same as the account payee cheque but no third party involvement is required.
Crossed chequeA crossed cheque has two parallel lines on the top left corner or across the cheque. It can only be deposited directly into a bank account and cannot be immediately cashed. A cheque is a written, dated and signed instrument that directs a bank to pay a specific amount of money to the bearer or named recipient.
In case of cheques, there are different types of cheque which one uses in various circumstances. Cheques should be encashed or deposited as soon as possible to prevent them from getting stale. When you receive a stale cheque, go to the issuer for a replacement.
