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. We offer a variety of current/cheque accounts, fixed deposits and savings account designed to suit your personal banking needs. • If the post-dated cheque is issued before the mentioned date on the cheque. • ATM – If you don’t have an active net banking or mobile banking service, you can visit your nearby ATM and access your account using the debit card and pin. Later, navigate to the services section, choose the ‘issue a new chequebook’ option and proceed as instructed. • Digital money transfer methods are becoming popular since cheques are a bit time-consuming to process payments.
Relevance Of Using Cheques
Both current account holder and savings account holder can issue a cheque. You may have observed cheques with two sloping parallel lines with the words ‘a/c payee’ written on the top left. These cheques are relatively safe because they can be encashed only at the drawee’s bank. Cheques are negotiable instruments covered under the Negotiable Instrument Act, of 1881.
It is important to choose the right type of cheque for the intended transaction to ensure that the payment is processed smoothly and securely. Cashier’s cheques are cheques issued by a bank on behalf of a customer. The funds for a cashier’s cheque are drawn from the bank’s own funds, not the customer’s account. This type of cheque generally ensures greater security and reduces the risk of bouncing compared to personal cheques. Cashier’s cheques are commonly used in high-value transactions where a guarantee of payment is essential.
Self cheques
They are only used in some cases for the movement of funds between the banks. There are several types of financial instruments that can be used for payment, including cash, checks, credit and debit cards, electronic transfers, and digital currencies. Cash is the most commonly used form of payment, but it can be easily lost or stolen. Cheques, which are written orders to pay a specific amount from an account, can be used to pay bills or withdraw cash. Credit and debit cards allow consumers to make purchases or withdraw cash using a credit or debit card account.
Prepaid Cards
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. Every cheque is unique and contains a unique cheque number, MICR, and IFSC code. The issuing party is called the drawer of the cheque, and the one it is issued to is called the payee. 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.
- All cheques are valid for a period of three months from the date printed on the cheque.
- This avoids the need to carry large amounts of cash when travelling abroad.
- The cheque is utilised to make safe, secure, and convenient payments.
- It can be encashed at the counter of the bearer’s bank and is transferable by the payee.
Types of Cheques in the Indian Banking System and Where Are They Used?
A cheque is a piece of document/paper which orders the bank to transfer money from the bank account of an individual or an organisation to another bank account. A cheque older than 6 months is called a stale cheque however, they are still valid and can be used for transactions. The drawee therefore for any cheque is always the bank as they are the ones tasked with the disbursal of the funds. Quite simply, self cheques have (or include) the term ‘Self’ in the payee’s name field as you are paying yourself the money from your bank account.
The cheque which is presented or shown for types of cheque in india payment after 3 months from the date of the cheque is called a stale cheque. Understanding these variations allows consumers to choose the right instrument based on their financial needs. Cheques provide essential documentation for payment, while cards ensure instant access to funds, enhancing the overall payment experience.