1. Summary
  2. Cheque
  3. Highlights of Cheque
  4. Type of Cheques


A cheque could be a written, dated, and signed instrument that directs a bank to pay a particular total of cash to the bearer. The person or entity writing the cheque is thought because the payor or drawer, whereas the person to whom the cheque is written is that the receiver. The drawee, on the opposite hand, is that the bank on that the check is drawn.

Highlights of Cheque

  • A cheque could be a written, dated, and signed instrument that directs a bank to pay a particular total of cash to the bearer.
  • It is different to instruct a bank to transfer funds from the payor’s account to the receiver or that person’s account.
  • Cheque options embrace the date, the receiver line, the quantity of the cheque, the payor’s endorsement, and a memoranda line.

Type of Cheques

Although blank cheques and crossed cheques are common, they’re not the sole styles of cheques you’ll be able to issue. A cheque could be a document that tells your bank to transfer the mentioned quantity to someone or an organization. There are chiefly 10 styles of cheques in India that you just ought to comprehend.” The 10 styles of cheques include:

  • Open cheque: Open cheque doesn’t have crossed lines, and hence, is additionally referred to as an uncrossed cheque. The open cheque will be paid at either of the banks, namely, the payer’s bank or the payee’s bank. Also, the open cheque is transferable by the receiver, which implies they will create some other person the receiver. The institution of the open cheque is needed to check in each the front and back of the cheque.
  • Post-dated cheque: A post-dated cheque bears a date later than the date it had been issued on. It will solely be paid when the date such by the remunerator. The post-dated cheque will be valid when the mentioned date however not before it. Hence, even though it’s conferred to the bank, the bank won’t method it till the mentioned date.
  • Stale cheque: A stale cheque has already passed its validity date and might now not be paid. Currently, a cheque is taken into account valid till 3 months from its issued date.
  • Traveller’s cheque: Issued by a bank, a traveler’s cheque will be paid by the receiver at another bank in another country. The payment is going to be received in this country’s currency. It becomes helpful after you are heading on a remote trip and don’t want to hold an excessive amount of money. A traveler’s cheque doesn’t have an end date.
  • Self cheque: A self-cheque has the word ‘self’ written because of the receiver. it’s utilized by the institution to withdraw cash from their checking account. A self-cheque will be paid solely at the issuer’s bank.
  • Banker’s cheque: Bank issue the banker’s cheque. Here the bank challenge is a banker’s cheque on behalf of the account holder to issue payment to a different person within the same town. 
  • Blank cheque: A blank check is that the one that has the sign of the institution and no alternative details are stuffed in. Blank cheques create a high risk as a result of if lost, anyone who finds it will fill in any quantity and issue it to themselves.
  • Bearer Cheque: Payable to bearer – Whoever bears or holds the instrument. If you do not give any crossing on the cheque, then it’ll be a bearer cheque. If you are taking it to the bank counter, you may be ready to en-cash the cheque, with no issue.
  • Ordered Cheque: Payable to order – solely to an explicit person/institution. If you give a crossing on the cheque, it’ll be an ordered cheque. There’ll be many conditions for associate ordered cheque as represented below.
  • Crossing of Cheques: Crossing of Cheques is outlined in Section 123 of instrument Act, 1881. There are four styles of crossing (i.e., golf stroke conditions on the cheque):
  • Crossed Generally: It provides the condition to the banker that the quantity will be attributable to any account however through a banking channel, so the beneficiary could also be derived.
  • Crossed Especially: Here the bank makes payment solely to the banker whose name is written within the crossing. It’s safer than the commonly crossed cheques, as a result of it restricts to the sole banker you wish to use.
  • Account receiver / Restrictive Crossing: The grouping the bank is meant to credit the quantity solely to the account of the receiver, obscurity else.
  • Non-negotiable Crossing: Here, you’re creating the cheque (which could be a negotiable instrument) non-negotiable. It suggests that you cannot endorse the cheque to an alternative person (restricting the exchangeability, see the previous posts)

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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