As an established means of payment in India, the use of a check is amongst the oldest and most reliable. Digital payments and internet transfers may have skyrocketed, but cheques are still a part of banking transactions. It is very important for the customers holding a Savings Account to understand the types of cheques. Knowing what to expect from each can help you use them properly and avoid mistakes that might cause delays, errors or rejections.
In this post, we will look at the more common types of cheques and their impact on you as an account holder, as well as why banks such as ICICI Bank provide cheque facilities for individuals and businesses.
When you open a Savings Account, the bank usually issues a chequebook. Many customers use cheques without fully understanding the rules that apply to different categories. This can sometimes result in:
Rejection of payments due to wrong usage
Inability to withdraw money when needed
Confusion between bearer, order, and crossed cheques
Lack of awareness about post-dated or stale cheques
A clear understanding of the types of cheques not only ensures smooth transactions but also protects you from fraud or misuse.
A Bearer Cheque is payable to the person who presents it at the bank counter. It does not require the receiver’s identification. For instance, if you sign a bearer cheque and hand it over to someone, that person can go directly to the bank and encash it.
Pros: Easy and quick for withdrawals.
Cons: Risky if lost or stolen since anyone can encash it.
Most banks, including ICICI Bank, allow bearer cheques but encourage customers to use them carefully due to the higher risk of misuse.
An Order Cheque is payable only to the person whose name is mentioned on the cheque or someone authorized by them. In this case, the bank verifies the identity of the person before releasing funds.
Pros: Safer than bearer cheques.
Cons: Requires identity verification which may take time.
A Crossed Cheque has two parallel lines drawn across the top left corner. This means the cheque cannot be encashed directly at the counter. Instead, the amount is transferred into the receiver’s Savings Account.
Pros: Safer as money goes directly to a bank account.
Cons: Cannot be used for instant cash withdrawal.
This type of cheque is an extension of a crossed cheque. It carries the words “Account Payee” between the two parallel lines. The cheque amount is strictly credited to the payee’s account only.
Pros: Highly secure, commonly used for official and personal payments.
Cons: Cannot be transferred or endorsed to another person.
A Post-Dated Cheque is written with a future date. The bank will only process it on or after the mentioned date. For example, if you write a cheque on 15th August but date it for 1st September, the bank will process it only in September.
Pros: Useful for scheduled payments like rent or EMIs.
Cons: Cannot be used immediately.
A Stale Cheque is one that is presented to the bank after the validity period has expired. In India, the validity period is usually 3 months from the date mentioned on the cheque. After this period, the cheque is no longer valid.
Pros: None, as it loses value.
Cons: Payment is rejected if presented late.
Although less common today due to the popularity of forex cards, a Traveller’s Cheque is used by people traveling abroad. It is considered safer than carrying cash.
Pros: Secure and replaceable if lost.
Cons: Not as widely accepted in today’s digital-first environment.
A Banker’s Cheque is issued by the bank itself and is payable only in the city of issue. It is often used for large payments like property deals or educational fees.
Pros: Highly reliable since it is issued by the bank.
Cons: Limited to the location of issue.
A Self Cheque is written by the account holder to withdraw money for personal use. You simply write “Self” in the payee’s name field.
Pros: Easy for cash withdrawal.
Cons: Risky if lost as it can be encashed by anyone if not secured properly.
Always Cross Large Payments
When paying a large amount, always issue a crossed or account payee cheque to ensure the money is deposited directly into the payee’s account.
Avoid Signing Blank Cheques
Never sign a cheque without filling in the details as it can be misused.
Write Clearly
Use consistent ink and avoid overwriting to reduce chances of rejection.
Check Validity
Ensure that cheques are not post-dated or stale when presented.
Keep Track of Used Cheques
Record cheque numbers in your chequebook to maintain proper financial tracking.
Despite the digital aids like UPI and the net banking, cheques are still in use. Cheques are still a favoured means of payment for businesses, landlords and government because they provide a paper trail.
For instance, ICICI Bank provides unlimited personalized checkbooks with each of its Savings Accounts and follow multiple layers of the security measure like MICR codes, watermarks and holograms to avert fraudulence. Customers can also apply for new chequebooks from home or online using internet Banking & the iMobile app.
Cheque is still a very relevant instrument of payment in India. Being the account holder of a Savings Account, you should have knowledge about these types of cheques to make use of them in an appropriate manner for safe side. From bearer and order cheques to account payee and post-dated dates, they all perform different roles — with a certain level of security bagging along.
Knowing of these differences allows you to better avoid delays, take the safe course of payment and use the full range of your cheque facilities. Banks such as the ICICI Bank offer reliable and convenient cheque services that are compatible with digital banking solutions, thus giving customers a combination of both the old world and new age technologies.
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