A cheque is a payment instrument issued by the bank against a savings or current account. The bank account holder can use a cheque to make payments. A cheque is an alternative mode of payment which is used by businessmen and individuals to make high value payments.
It is one of the safest and trusted modes of payment, as only the payee can encash the cheque at the bank. A cheque contains the account holder’s and bank information on the MICR band. Therefore, when a payee submits the cheque to the bank, the bank sends it to the originating bank for verification and the payment of the amount to the designated payee.
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Writing a cheque is a simple and easy task. The Cheque book is generally issued by banks or financial institutions against a checking or savings bank account. If you are a first time user, follow the guidelines given below to write the cheque.
A cheque is a financial instrument that allows the account holder make payments easily. A cheque enables the account holder negate the risks associated with cash payments.
See Also: How To Write A Safe Cheque?
There is space provided on the top right corner of the cheque, for you to write the date. A cheque with no date is not honoured by the bank. A cheque with an incorrect date may also lead to rejection, especially if the date is more than 3 months old. Always mention the same date that you signed the cheque on.
The first line of the cheque contains the words ‘pay’. You have to write the name of the payee. A payee is a person to whom the money is to be paid. If the cheque is assigned to an individual, then you must first write their name and then the surname. If the cheque is assigned to a company, then write the name of the company in full and do not use any acronym.
You must then provide the amount that needs to be paid to the payee. Write the amount in words in the ‘rupees’ section. After you have written the amount in words remember to write ‘only’. Mentioning this is important as it prevents misuse of the cheque. Do not have extra gaps between the words and strike out any additional spaces left.
See Also: Types Of Cheques
Write the amount in numbers/figures in the box provided. Make sure to leave no gap between writing the amount and use the symbol ‘/-‘ at the end. Using this symbol stops any person from adding additional zeros or a number to this section of the cheque.
At the bottom right corner, there’s space provided to put your signature. The signature is proof that the account holder has asked the bank to pay a certain amount to the payee. Put your signature in the space provided. Refrain from signing on the MICR band, as it may lead to the dishonouring of the cheque.
There are some do’s and don’ts when it comes to writing a cheque. A cheque must be clean and should include only the necessary information. There are times when people make careless mistakes which leads to the cheque being dishonoured or misused. Listed below are some important things that you must avoid while writing a cheque:
Do not scribble or make multiple corrections on the cheque. It is obvious that mistakes can happen while filling a cheque. So instead of scribbling, cancel the existing cheque and write a new cheque.
Never overwrite or rewrite a cheque. Overwriting a cheque leads to a rejection by the bank as they believe the cheque is being misused.
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