A cheque is a piece of paper provided by banks which can omit the use of money and allow transactions such as payments and money transfer. It is a safer alternative to carrying money. The person who needs to make a payment issues a handwritten check through their account, and the bank pays it once the recipient, also known as the bearer, has claimed it with their proper identification. Although it doesn’t completely replace money, the sum will not be paid if the account holder is lacking the funds, in which case the bank can refuse the cheque. A bearer’s cheque is another kind of cheque used in which the words "or bearer” appears on the cheque, and is used to pay any person who is specified or presents the cheque to the bank. This type of cheque is more risky because if it is misplaced, any person who claims the cheque can collect payment.
There are also other types of cheques; another is the order cheque which is when the bearer’s cheque is cancelled and the words "or order” are written on the front of the cheque. This kind of cheque is payable to any person who is specified as the recipient or payee, as well as any other person to whom it is endorsed. The uncrossed or open cheque is not crossed and can be obtained at any bank counter, and it can be used as a bearer cheque or open cheque.
A crossed cheque refers to one wherein two parallel lines are drawn on the cheque, and may contain additional words such as "& co”, "account payee”, or "not negotiable”. It cannot be encashed at the bank but will be credited to a payee’s account. An anti-dated cheque is one that states a date earlier than on when it is presented to the bank, however it can only be used up to six months back. Lastly, a stale cheque is one that is presented to the bank up to six months from the date it was written, therefore will not be honored by any bank.
There are also other types of cheques; another is the order cheque which is when the bearer’s cheque is cancelled and the words "or order” are written on the front of the cheque. This kind of cheque is payable to any person who is specified as the recipient or payee, as well as any other person to whom it is endorsed. The uncrossed or open cheque is not crossed and can be obtained at any bank counter, and it can be used as a bearer cheque or open cheque.
A crossed cheque refers to one wherein two parallel lines are drawn on the cheque, and may contain additional words such as "& co”, "account payee”, or "not negotiable”. It cannot be encashed at the bank but will be credited to a payee’s account. An anti-dated cheque is one that states a date earlier than on when it is presented to the bank, however it can only be used up to six months back. Lastly, a stale cheque is one that is presented to the bank up to six months from the date it was written, therefore will not be honored by any bank.
