What is a Cheque and How to Write it

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What is a Cheque and How to Write it

Checks are still used extensively in today's world, even if they are less often than they were in the digital age. A written, dated, and signed draft instructing a bank to pay the bearer a certain amount of money is called a check. The payee is the individual to whom the check is made, while the person writing the check is referred to as the payor or drawer. The bank that the check is drawn on, however, is the drawee.

Different Kinds of Cheques

It is not enough to just understand what a cheque is. You need to be acquainted with the many forms that checks may take in order to have a thorough understanding of how they work. You need to be familiar with many different kinds of checks, including the following:

1. Cheque in the name of the bearer

The bearer check is made payable to the person who holds the cheque or "bears" it. It is a kind of open instrument that may be cashed by anyone who has it.

2. Request a Cheque

An order check is only payable to the person or organization named as the payee on the cheque. To be cashed, it must be signed by the payee.

3. Cheque Crossed

The face of a crossed cheque has two parallel lines. These lines indicate that the check should be deposited straight into the payee's bank account. It also prevents the cheque from being paid over the counter. 

4. Make a Cheque

An open cheque is one that has not been crossed or designated as a bearer or order check. It is payable to the individual who presents it and may be paid over the counter.

5. Cheque Post-Dated

The payment date on post-dated checks is an upcoming date. Only on or after that date does it become redeemable.

6. Old Cheque

Cheques have an expiry date, just like that forgotten meal at the back of your fridge. 

A stale check is a cheque that has expired. Remember that submitting stale checks beyond their due date will only result in disappointment.

7. Cheque for Travel

This cheque answers the phone when Adventure calls. 

A traveler's check is a fixed-amount cheque that has been pre-printed. It is intended for usage when traveling. It is also a more secure and handy alternative to carrying cash. 

8. Self-Check

A self-check is one that is written by the account holder and made payable to themselves. It enables you to take money out of your account. 

Characteristics of a Cheque

A cheque has the following characteristics:

1. Individually issued

Individuals with a savings or current account may issue a bank check. It offers customers an easy payment mechanism.

2. Amount Fixed 

The amount on the cheque cannot be adjusted later. It offers a safe way to transmit a precise amount of money to the payee.

3. Payment Order Formal

A check is not a request to the bank, but rather an unconditional command. It is a legally enforceable order to the bank to make the stated payment.

4. Authenticity and Authorization

The cheque is only legitimate if it is signed and dated. Cheques that are not signed are deemed invalid and will not be honored by the bank.

5. MICR Number

The bottom of the cheque has a Magnetic Ink Character Recognition (MICR) code. It makes automated processing easier for banks.

How to Write a Cheque

Step 1: Write the Cheque's Date

On the line given in the upper-right corner of the bank check, write the date. You must provide the date in the normal format, such as "DD/MM/YYYY."

Step 2: Enter the Payee's Name.

Can you make out the "Pay" line? Fill in the complete name of the organization or individual to whom the payment is being made.

Step 3: Write the Amount in Numeric Form

Now, against the line with the dollar sign ($), put the payment amount in numbers. You must include cents in decimals if appropriate.

Step 4: Write Down the Total in Words

Write the amount in words on the line underneath the payee's name. You must begin with the dollar number and then include the cents as a fraction of a hundred.

Step 5: Include a Memo

You may include a short remark or note in the allocated portion of the check if you choose. In most cases, a letter is included to identify the purpose of the payment or to offer further information.

Step 6: Sign the Cheque

Sign your name in the lower-right corner of the check with your signature. Remember to use the one associated with your bank account. The act of signing verifies and certifies the legitimacy of the check.

  • Are checks still widely accepted today?

  • Can I Write a Cheque with a Post-Dated Date?

  • How Do You Correct a Mistake When Writing a Check?

  • Who may cash a bearer cheque?