An open cheque can be cashed at either of the banks, namely, the payer’s bank or the payee’s bank. 4. Open chequeĪn open cheque does not have crossed lines, and hence, is also called an uncrossed cheque. A crossed cheque is also safer because it can be cashed only at the payee’s bank. It means that the specified sum of the cheque, regardless of who is handing it over, will only be transferred to the individual/organisation whose name is mentioned as the payee. 3. Crossed chequeĪ 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. In this case, the bank does not check the bearer’s identity before making the payment. It means that only the individual whose name is mentioned as the payee can receive the specified sum of money. An order cheque is the one that has the words “or bearer” cancelled out. The second type of cheque is the order cheque. The bank need not request the authorisation of the issuer to make the payment of this cheque. It also makes a bearer cheque transferable, as anyone who is carrying it can receive the payment. It means that the amount of the cheque issued can be either received by the payee or the bearer. ![]() These cheques have the words “or bearer” printed in front of the name of the payee. There are mainly ten types of cheques in India that you should know about.” The ten types of cheques include: 1. Bearer ChequeĪ 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. The banks are the drawer in cheque payments. The drawer writes the cheque in the name of the beneficiary, requesting the bank to transfer the mentioned amount to the beneficiary from their account. In a cheque transaction, three parties are involved namely, the drawer, the drawee, and the beneficiary or payee. A cheque is a common method of money transfer among merchants and small businesses.Ĭheques are negotiable instruments covered under the Negotiable Instrument Act, of 1881. It is issued to a current or savings account holder to conveniently transfer money within and outside the bank. But what is a cheque? Meaning of ChequeĪ cheque is a paper instrument that orders the bank to transfer money from the sender’s account to another account. Unlike cash, cheque payments are recorded with the bank and reflected in your bank account. A cheque is written by an individual or an organisation for large payments. ![]() Although blank cheques and crossed cheques are common, they are not the only types of cheques you can issue.
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