Cheque Meaning

In order to learn about the cheque and its uses, there are certain important facts which should be known for gaining precise insight about this popular money transfer mode. Some of the prime aspects are mentioned below:

• A cheque is known as an unconditional order.
• It is mandatory to sign the cheque only by the remitter.
• The amount has to be mentioned clearly in the cheque.
• It is always payable on demand.
• The payment made using a cheque is always in cash.

Writing a cheque might sound simple, but the process does take certain considerations. Therefore, it is important for the individual to learn the different steps involved in issuing a cheque through any bank across India.

1. Edit the words ‘OR BEARER’ and Add ‘A/C Payee’

It is important to cut the words ‘Or Bearer’ and write ‘A/C Payee’ at the top left corner of the cheque. This action would ensure that no one apart from the person in whose name the cheque is drawn can possess the stated amount. However, if you aren’t able to omit the words ‘Or Bearer’, then the cheque can be recognized as a Bearer cheque and any person holding the cheque can claim the mentioned amount.

2. Don’t Leave Spaces

Whenever you are drawing a cheque ensure not to leave any space between the words PAY and the Beneficiary’s name. Further, try to keep minimum space between the name and surname. Following this practice reduces the chance of fraud if anyone tries to fit in new alphabets before or after the name.

3. Write ‘ONLY’ Whenever Mentioning the Amount in Alphabets

The mention of the word ‘ONLY’ right after you fill the amount in words is a necessary practice. Moreover, you need to add ‘slash’ followed by a hyphen after mentioning the amount in numbers. Further, spaces should be avoided that is indeed a common step to follow. Your cheque meaning wouldn’t be acknowledged if the amount gets altered by someone due to careless mistakes.

4. Never Sign on the MICR Band

Signing a cheque should be done quite carefully. Your transaction can be clearly canceled if by any chance you end up placing your signature right over the MICR band. Every person should utilize the space provided right above the Name of the Account Holder for signing.

5. Mention the Correct Date

Have you ever issued a cheque without mentioning the date? The consequences simply lead to dishonouring of the cheque. Moreover, the dangers are immense, since any fraudster can write a new date and pull out cash quite easily. Furthermore, do make sure you do not submit cheques that have a post- or pre-date mentioned.

6. Maintain Record of Your Cheque

Every individual should start practicing cheque safety measures. In simple terms, cautious preservation of each of your cheque record must be managed in a file or booklet. Moreover, essential details from a cheque such as a cheque number, issuer name, and date should be secured for future dealings. Although, cheque books do offer a section for mentioning all such information, backup safety is necessary. By abiding this step, you can surely avoid any sort of suspicious activity or fraud related to cheque dealings.

7. Don’t Overwrite

Out of all the above-mentioned rules for writing a cheque, overwriting is another crucial action which should be avoided. It primarily focuses on scribbling or text cancelation, which shouldn’t be visible on the cheque. The bank would directly decline the request, so be careful. One has to write a new cheque if the banker finds out any overwriting mistake.

• Convenient in comparison to carrying cash.
• The payments can be blocked if required.
• Cheques tend to be safer if crossed.
• A cheque can be issued anytime.
• One big advantage of cheque transactions is that lost cheques can be traced.
• Customers are offered a statement at the end of each month.

• Try not to submit a cheque without the presence of Date, Payee name, the amount in numbers and alphabets etc.
• Always make sure you destroy all canceled cheques until they are needed for complex banking procedures such as submission for ECS.
• The signature should always be kept clear. If you hold a doubt, then sign the cheque again so as to avoid the case of cheque bounce.
• Always mention the mobile number or connection number, on the reverse side of the cheque whenever you are making payments for utility bills.
• Try not to fold, disfigure or stick the MICR Band present on the cheque.

Cheque meaning and its usage can be carefully gathered through the official website of various banks. Moreover, you can even refer the Reserve Bank of India’s website that offers specific guidelines regarding the proper filling of cheques and their issuing. These online sources are helpful for people who haven’t actually used the cheque mode of payment for sending and receiving money. Moreover, both younger and older age groups can benefit from this information.