A cheque is issued to direct the bank to pay the specific amount to the payee or the beneficiary to whom the cheque is addressed. Both current account holder and saving account holder can issue a cheque. It is a negotiable instrument used to carry a transaction. There are different types of cheques issued by the bank – bearer cheque, order cheque, open cheque, crossed cheque, post-dated cheque, and several others.
The cheque guarantees the payment of the amount to the bearer. While writing a cheque date, amount, signature of the account holder and the name of the beneficiary are necessary in order to initiate the payment by the bank. If any of the information is written wrong, the bank will not accept your cheque.