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Cheque and its Types

A cheque is an agreement between two individuals or organizations to make a payment. In simple words Cheque is an order to a bank to pay a stated sum from the drawer’s account, written on a specially printed form. Cheque is used to make safe and convenient payment. It is less risky and the danger of loss is minimized.

Types of Cheques

Bearer Cheque

Bearer Cheque refer to a cheque that is payable to whoever presents the cheque, rather than to a designated payee.

Uncrossed/Open Cheque

When a cheque is not crossed, it is known as an “Open Cheque” or an “Uncrossed Cheque”. The payment of such a cheque can be obtained at the counter of the bank.

Crossed Cheque

Crossing of cheque means drawing two parallel lines on the face of the cheque. A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee’s account.

Anti-Dated Cheque

If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as “anti-dated cheque”. Such a cheque is valid upto three months from the date of the cheque.

Post-Dated Cheque

If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A post dated cheque cannot be honoured earlier than the date on the cheque.

Stale Cheque

If a cheque is presented for payment after three months from the date of the cheque it is called stale cheque. A stale cheque is not honoured by the bank.