Different Types of Cheque
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There are several types of cheques: Bearer cheques can be endorsed to anyone holding the cheque and no identification is required. Order cheques can only be cashed by the named payee. Crossed cheques can only be deposited, not cashed. Account payee cheques are deposited directly into the named payee's account. A cheque is considered stale if over 3 months old. Post dated and ante dated cheques are dated for the future or past respectively. Self cheques allow the drawer to withdraw for themselves. Traveler's cheques can be cashed while traveling abroad. Blank cheques only contain the drawer's signature.
Different Types of Cheque
- 1. Different types of Cheques Dr.N.RAMESHKUMAR Assistant Professor Department of Commerce with Compute Applications PSG College of Arts & Science Coimbatore 641 014 TamilNadu, India
- 2. Different Types of Cheque • Bearer Cheque • The bearer cheque is a type of cheque in which the bearer is authorised to get the cheque encashed. This means the person who carries the cheque to the bank has the authority to ask the bank for encashment. • This type of cheque can be used for cash withdrawal. This kind of cheque is endorsable. No kind of identification is required for the bearer of the cheque.
- 3. • For example: A cheque has been signed by Arjun (drawer) and the payee for the cheque is Varun. Varun can either go himself to the bank or can send a third person to get encashment for the cheque. No identification shall be required for the bearer’s name. • If a person does not want their cheque to be endorsable, they can strike off the “OR BEARER” option mentioned in the cheque
- 5. • Order Cheque • 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. • For Example: If a cheque has been signed with the name of Varun, then only the payee can visit the bank to get an encashment for the same for a order cheque.
- 6. • Crossed Cheque • In this type of cheque, no cash withdrawal can be done. The amount can only be transferred from the drawer’s account to the payee’s account. Any third party can visit the bank to submit the cheque. • In case of a crossed cheque, the drawer must draw two lines at the left top corner of the cheque.
- 8. • Account Payee Cheque • This is the same as the account payee cheque but no third party involvement is required. The amount shall be transferred directly to the payee’s account number. • 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”.
- 9. • Stale Cheque • In India, any cheque is valid only until 3 months from the date of issue. So if a payee moves to the bank to get withdrawal for a cheque which was signed 3 months ago, the cheque shall be declared a stale cheque. • For example: If a cheque is dated January 1, 2020 and the payee visits the bank for withdrawal on May 1, 2020, his/her request shall be denied and the cheque is declared stale.
- 10. • Post Dated Cheque • 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. • For example: If the date on which the drawer is filling the cheque is May 10, 2020 but he wants the payment to be done later, he/she can fill the cheque dates as May 30, 2020. It shall be called a post dated cheque.
- 11. • Ante Dated Cheque • If the drawer mentions a date prior to the current date on the cheque, it is called ante dated cheque. • For example: If the current date is January 30, 2020 and the drawer dates the cheque as January 1, 2020. It shall be considered as an ante dated cheque.
- 12. • Self Cheque • If the drawer wishes cash for himself he can issue a cheque where in place of the Payee’s name he can write “SELF” and get encashment from the branch where he owns an account. • For example: If a person wants Rs.1,00,000/- in cash, he can issue a self cheque and visit his bank branch where he owns an account and get encashment in place of cheque.
- 14. • Traveler’s Cheque • As the name suggests, the Traveler’s cheque can be used when a person is travelling abroad where the Indian currency is not used. • If a person is travelling abroad, he can carry the traveler’s cheque and get encashment for the same in abroad countries.
- 15. • Blank Cheque • When a cheque only has a drawer’s signature and all the other fields are left empty, then such a type of a cheque is called a blank cheque.