Types of Cheques: Banking Awareness Special Series |

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Team Adda247 and Bankers Adda have introduced a Banking Awareness Special Series for SBI and IBPS Interviews 2021. In this series, we will be introducing the candidates with some banking awareness topics On a daily basis that will improve their general awareness and will also ensure that the candidates do not lack in any banking term when it comes to the interview round. Today the topic of our Banking Awareness Special Series is ‘Types of Cheques’.

Types of Cheques

In Banking Terms, the cheque is a document that can be issued to your bank by you, directing it to pay the specified sum mentioned in the cheque to the person whose name is borne on the cheque.

There are many types of Cheques and we are going to discuss some of them here which are important for our knowledge.

1.) Bearer Cheque: The Cheque which is made to the person bearing or carrying the cheque for the payment is called Bearer cheque. The Banks do payment to the person who has this kind of cheque or whose name is on the cheque no other formalities or authorization made by the bank to make payment.

2.) Crossed Cheque: This kind of cheque has two parallel lines with the words mentioned ‘a/c payee’ written on the left corner of the cheque. The payment will be done by banks to only the one whose name is mentioned on the cheque irrespective of who is going to present it. These types of cheques are relatively the safest from others because they can be encased only at the drawee’s bank.

3.) Order Cheque: In this type of cheque the words ‘or bearer’ is canceled thus it can be issued to the person whose name is on the cheque only. The bank will check its background to authenticate the cheque bearer’s identity before releasing the payment.

4.) Open Cheque: An open cheque is an uncrossed cheque. This type of cheque can be encased at any bank and the payment can be made to the person bearing the cheque. This cheque can be transferred from the original payee to another payee. Only the issuer needs to mark his signature on both sides of the cheques.

5.) Post-Dated Cheque: These types of cheques bear future dates of payment. Even if the bearer presents it before the date to the bank, the bank will not process the payment. The bank will only made payment on the date or after the mentioned date on the cheque. This cheque validates past the mentioned date but not before the date.

6.) Stale Cheque: The cheque which has passed its validity from its issuance by three months is called a stale cheque. It cannot be processed by the bank for the payment.

7.) Self Cheque: The cheque bearer the word ‘Self’ in the drawee’s column is known as ‘Self cheque’. Self Cheques can be drawn only at the issuer’s bank.