Various Types of Cheque
Dr.S.NAGALINGAM,
M.Com., M.Phil., P.G.D.C.A., Ph.D.,
Assistant Professor,
PG & Research Department of Commerce,
Cardamom Planters’ Association College,
Bodinayakanur.
Various Types of Cheque
1. Open Cheque
Otherwise called as uncrossed cheque, it is one on which cash is payable at the counter of the bank or it is transferred to the bank account of the person whose name is written on the cheque. It is negotiable, i.e. it is transferable in nature.
2. Bearer Cheque
Bearer cheque refers to the cheque which can be encashed by the person whose name is written on the cheque or anyone who presents the cheque before the bank for payment. It is negotiable in nature, which can be transferred by simply delivering it and so endorsement is not needed. No identification of the presenter or holder is required in case of a bearer cheque.
������������� 3. Order Cheque
As the name suggests, it is the cheque which becomes payable to the person or organization whose name is specified on the cheque or to his order. To convert a bearer cheque into an order cheque, the word ‘or bearer’ is stricken off from the cheque. Endorsement of the cheque to the third party is done by simply signing on the cheque.
4. Crossed Cheque
You might have observed, two transverse parallel lines at the top left corner of some cheques, which may or may not have the words – & Co., A/c payee or Non-Negotiable. Such cheques are regarded as crossed cheques. The amount on such cheques is credited to the account of the payee.
�5. Self Cheque
When a person wants to withdraw money from his own account, by writing ‘self’ at the name of the payee, is called self-cheque. Do not cross the cheque or cancel the words ‘or bearer’ from the cheque. These cheques should not be crossed, as well as the words ‘or bearer’ should not be stricken off from the cheque, so that any person as your representative can receive the amount on your behalf.
6. Blank Cheque
A cheque which is only signed, but the name of the payee and date is not indicated, is called a blank cheque. Such cheques can be made account payee, and the maximum limit of withdrawal can be mentioned.
�7. Stale Cheque �
A cheque bears a date and is valid up to three months of the stated date. If a cheque is presented before the bank, after the expiry of the reasonable period, i.e. three months after the date, then it is called stale cheque.
8. Post-Dated Cheque
When a cheque is drawn containing a future date, it is called post-dated cheque. In such cases, money will not be payable by the bank before that date.
���������9. Ante-dated Cheque
A cheque containing a prior date, is called an ante-dated cheque. Bank honours cheques until three months to the date mentioned.
10. Banker’s Cheque
Otherwise called a pay order, it is a non-negotiable instrument, which is issued by the bank on behalf of the customer, which is payable in the same city.
11. Cancelled Cheque
Due to any kind of mistakes while writing the cheque, it is cancelled, and so it is called cancelled cheque.
�12. Mutilated Cheque�
A cheque which is torn, damaged, crushed or washed, is called a mutilated cheque. Such cheques are honoured only when certain details are visible, after confirming with the drawer.
13. Traveler’s Cheque
A cheque issued by a bank for a fee, containing a fixed amount. These cheques are enchased or used to make payment in a foreign country, after endorsement by the signature of the holder.
14. Gift Cheque
Cheques that are used for the purpose of gifts and prizes, usually very large in size, are called Gift Cheques. Banks charge a fee for issuing such cheques.