What is a Cheque?
- What is a Cheque?
- How to Fill a Cheque?
- Frequently Asked Questions
A cheque is a document drawn out by a customer to make a cashless transaction. This instructs the bank to withdraw the mentioned amount from the clients’ accounts and deposit it into the mentioned person’s or organizations’ account on the specified date. In today’s world, there are many other cashless ways of making a payment, like an internet banking, mobile wallets, UPI, etc. However, cheque transactions are still quite prominent and accepted modes of payment. Here’s the process of cheque filling:
How to Fill a Cheque?
Let’s take a look at how to fill a check in five simple steps:
Step 1: Enter Name
Writing the person’s or organization’s name. This part of the check filling process requires extra care. Make sure you have the correct information before writing this on the check.
This phase of the check filing process requires the person’s full name, first name, last name, and middle name, if applicable. If you’re writing about a corporation, you’ll need to use their entire name rather than an acronym, unless otherwise specified.
If this is a bank-to-bank transfer, then always put a double-cross line on the left top corner of the cheque and write ‘A/C Payee’.
Add a running line after the whole name has been written to prevent anyone from tampering with it and adding further names or alphabets at the end.
In this procedure of cheque filling, if you wish to make a payment to the bearer of the cheque, you do not need to place a double line and you do not need to write A/C payee. Keep in mind that anyone who has such a check can cash it for the amount written on it.
Step 2: Date of Withdrawal
The top right corner of the check has this information. The date format is DDMMYYYYY, which means you must write the day first, then the month, and then the year.
For example, if you want to write on August 6, 2021, the check number will be 06082021.
This is the date on which your check can be deposited, thus it can be today or any other date in the future. Post-dated cheques are what they’re called.
Please double-check the date to ensure that the payee does not deposit the check before the date shown on the check.
Step 3: Amount in Numbers
The amount to be paid in numbers is an extremely crucial piece of information on the cheque and an integral aspect of the cheque filling process.
This must be clearly written inside the rectangle box with Rs. or in it.
Make sure to put /- at the end of the amount after it’s written.
This is to ensure that no one changes the amount by adding extra numbers at the end.
Step 4: Amount in Words
The next stage in the cheque filling process is to write the payment amount in words.
This is to avoid any misunderstanding about the amount stated in the numbers.
Add a continuous line after the total sum is written in words to prevent anyone from manipulating and adding superfluous words or alphabets.
Step 5: Signature
The issuer must sign the cheque once all of the information for filling it has been entered and confirmed. This is just above your name in the bottom right corner.
A check without a signature is not deemed genuine, and the bank will not clear it.
Also, if the issuer’s signature on the check does not match the signature on their paperwork, the cheque will not clear and will not be placed in the payee’s account.
As a result, greater caution is essential when completing this step of the check-writing process.
Recommended: Duplicate Checks: What Are They?
Frequently Asked Questions
What is the maximum time for withdrawing a cheque?
A cheque is valid for three months from the date of issuing. This time, however, varies from bank to bank.
How much time does it take for a cheque to be cleared by the bank?
In India, the time taken for cheque clearance is 3 to 5 working days after the cheque has been deposited. Until the cheque is cleared, the amount does not get deposited in the t0 payee’s account and hence cannot be withdrawn from the account. There are cases when the cheque clearance can be expedited by the customer, where the bank can charge a special clearance fee and the bank can specify the number of days it will take to clear the cheque.
What is a self-cheque?
Self-cheques are filled by the cheque issuer to withdraw money for himself or herself, as the name implies. The issuer must sign the check and write Self in the Payees field. The remainder of the spaces must be filled as usual.
How can a Cheque be stopped from clearing? In other words, how can one do ‘stop payment’ on an issued cheque?
To stop payment, the issuer must make a personal visit to the bank and make an oral or written request. An online request can be made on the bank’s website, as well as a request made over the phone. The bank will need the check specifics, such as the date, check number, and amount, to block the check from clearing.
Several banks impose a fee for this service, which can range from Rs. 100 to Rs. 500 depending on the number of checks and the bank.
When can a bank not process your cheque?
A bank may reject or fail to accept your check request in a variety of circumstances.
– The issuer’s account has an insufficient balance and doesn’t allow the bank from withdrawing the amount mentioned in the cheque.
– The cheque hasn’t been filled incorrectly or incompletely, so the bank is unable to determine the vital details required to process it.
– The cheque is outdated, which means the date mentioned on the cheque is more than 3 months old.
– The issuer’s signature on the cheque does not match with their documents leading to cheque bounce.
Cheques deposited to the bank that are illegible or rewritten are frequently rejected.