It’s a bearer’s cheque with the words “account payee” inscribed in two parallel lines on the top left-hand corner. It’s the safest type of cheque to write because only the person whose name appears on the cheque will have money sent to their account. A bank issues a banker’s cheque on behalf of an account holder to issue payment to another person in the same city. Banker’s cheques are only valid for three months, however, post their validity period they can be revalidated if certain conditions are fulfilled. 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. These cheques have the words “or bearer” printed in front of the name of the payee.

1. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable.
2. The payee is the person who receives the payment from the cheque-holder through the drawee bank.
3. This is the same as the account payee cheque but no third party involvement is required.
4. Please consult your financial advisor before making any financial decision.

The payee must endorse the cheque by signing it before it can be cashed or deposited. Order cheques are more secure than bearer cheques because they can only be cashed by the payee, and it is difficult for fraudsters to cash someone else’s cheque. Order cheques are commonly used for personal, business, and other financial transactions. They are considered as the standard type of cheques in most countries.

How Many Different Types of Bank Cheques in India

Credit and debit cards allow consumers to make purchases or withdraw cash using a credit or debit card account. Electronic transfers, such as wire transfers and ACH transactions, enable the transfer of funds between accounts. Digital currencies, like Bitcoin, are decentralized digital assets that can be used to make payments. A cheque is issued to direct the bank to pay the specific amount to the payee or beneficiary to whom the cheque is addressed. Both current account holder and savings account holder can issue a cheque.

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Order cheques can only be encashed by the payee or the payee’s authorised agent, making them a secured form of payment. This specificity makes order cheques less risky than bearer cheques. A bearer cheque is a type of cheque that is payable to whoever holds or presents it at the bank. You can use bearer cheques for convenient cash withdrawals or payments. 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”. The amount of money that needs to be transferred, payee’s name, date and signature of the drawer are all mentioned in a cheque.

A cheque must be types of cheque in india signed by the account holder and the payee’s name and address must be provided. Cheques can be cashed at banks or deposited into an account. An open cheque is a type of cheque that can be cashed or deposited by anyone who has possession of it. Unlike crossed cheques, open cheques do not have any special markings, and do not indicate the account to which the funds should be credited. Open cheques are considered to be less secure than crossed cheques, as they can easily be lost or stolen and cashed by someone other than the intended recipient. Open cheques are less common in use and most of the time banks discourage using them.

It means that the amount of the cheque issued can be either received by the payee or the bearer. It also makes a bearer cheque transferable, as anyone who is carrying it can receive the payment. The bank need not request the authorisation of the issuer to make the payment of this cheque. This cheque can be presented by anyone whosoever found it or get it to the drawer’s bank and get the payment.

Bearer cheque

A cheque is valid for three months from the date of issuance. Yes, a dishonoured cheque can be used again if you think there are chances of cheque being honoured the second time. Every cheque contains a cheque number that is mentioned on the leaf.

It contains all the necessary fields to complete a cheque transaction. The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Usually, the banks take 1-2 business days to process and clear the cheque payment.

Ante Dated Cheque

• A cheque must be signed before submitting otherwise it is considered invalid. I ensure a range of subjects are covered with precision and clarity. So, you must be very cautious when handling open cheques to avoid fraud or theft. These cheques should only be issued when necessary with the best precautions. A cancelled cheque is a cheque that has been rendered unusable for payment. It is typically done by drawing two parallel lines across the face of the cheque and writing the word “CANCELLED” in between the lines.

Earlier, the period was six months from the date of issue. So, any cheque becomes a stale cheque if it is not encashed before three months after its issuance. Such types of cheques can only be deposited into the payee’s Bank Account and cannot be encashed at the counter. If a drawer wants the payee to apply for withdrawal or transfer of money after the present date, then he/she can fill a post dated cheque.

The time may increase depending on the day of the week since it is a manual clearing process. 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.

A bearer cheque or open cheque is a cheque in which the individual bearing/carrying his/her name on the cheque can receive the payment. The bank will not ask for any authorization from the issuer while allowing the payment to the person who will carry the cheque to the bank. It can easily be identified by the words ‘or bearer’ printed on them. The purpose of negotiable instrument is to ensure that monetary transactions can take place smoothly as per the required specifications.

If you submit this cheque after the date mentioned on the cheque, it will still be valid, and you can still make the payment. So, in case of an account payee cheque, the payment will be made only by depositing it to the payee’s account. These cheques can be issued in different currencies and include security features such as watermarks and dual signatures to reduce the possibility of fraud. They provide an easy means of paying ‘ready cash’ and spare people from carrying bulk cash when visiting a foreign country. However, you should note that self-cheques are a security concern. If the cheque is lost, stolen or even misplaced, anyone can easily take advantage of the cheque and withdraw cash from the drawer’s account.

Order cheques are for business dealings and individual payments where the drawer mentions the payee’s name on the cheque. The bank validates the payee’s identity before making the payment. A cheque is a frequently used mode of payment among individuals and companies. There are different types of cheques, each having specific functions. This type of cheque cannot be endorsed, i.e., only the payee, whose name has been mentioned in the cheque is liable to get cash for that amount. The drawer needs to strike the “OR BEARER” mark as mentioned on the cheque so that the cheque can only be encashed to the payee.

Within three months of issuance – the payee can resubmit the identical cheque. The payee should also send a notification to the drawer saying that the money needs to be paid within the period of 15 days of receipt of the notice. The amount can only be transferred from the drawer’s account to the payee’s account.