What is Cheque and its uses?

What is Cheque and its uses?

A Cheque is a document which orders a bank to pay a particular amount of money from a person’s account to another individual’s or company’s account in whose name the cheque has been made or issued. The cheque is utilised to make safe, secure and convenient payments.

What are the uses of Cheque Class 10?

Answer: A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been drawn. The facility of cheque against demand deposits makes it possible to directly settle the payments without the use of withdrawal.

What is the importance of using checks?

Checks are a useful financial product for personal and business use with their own unique features. Checks also provide a level of security in your transactions that cash does not. So don’t forget about this important tool in your financial arsenal and learn to use checks to their full advantage.

What are the types of Cheque?

Types of Cheques: Know What are the Different Types of Cheques

• Bearer Cheque.
• Order Cheque.
• Crossed Cheque.
• Open cheque.
• Post-Dated Cheque.
• Stale Cheque.
• Traveller’s Cheque.
• Self Cheque.

What are the features of a Cheque?

Features of a cheque

• A cheque should be in writing and properly signed by the drawer.
• A cheque contains an unconditional order.
• A cheque issued on a specified banker only.
• The amount specified is always certain and should be clearly mentioned both in figures and words.
• The payee of a cheque is always certain.

What are the main features of Banker’s Cheque?

Features of a Banker’s Cheque

• Banker’s cheques are issued only for the clearing area of the respective bank.
• The validity of a banker’s cheque is 3 months from the date of issue.
• A banker’s cheque cannot dishonour at all unless it is a fake.

What are the 5 parts of a check?

Here are the different parts of a check to know when you’re filling out or depositing a check.

• Your information.
• Check number.
• The date.
• The recipient’s name.
• The payment amount.
• Memo line.
• Bank name.
• Signature.

What are four elements of Cheque?

The four main items on a cheque are:

• Drawer: the person or entity whose transaction account is to be drawn.
• Payee: the person or entity who is to be paid the amount.
• Drawee: the bank or other financial institution where the cheque can be presented for payment.
• Amount: the currency amount.

What is the essential element of Cheque?

It contains an unconditional order to pay: A cheque cannot be drawn so as to be payable conditionally. The drawer’s order to the drawee bank must be unconditional and should not make the cheque payable dependent on a contingency. A conditional cheque shall be invalid.

What are the security features of a Cheque?

There are several security features embedded in the cheque, few of them are watermarks, logo, Serial number, account number, bank name and these features can be visible under normal or different light sources and instruments.

What is the order Cheque?

The order cheque is the one wherein the word bearer is canceled on the cheque. As the word bearer gets canceled the cheque automatically becomes an order cheque. An order cheque is paid to the payee across the bank’s account. The identification of the payee is insisted on by the bank while presenting an order cheque.

What is order Cheque example?

What is an Order Cheque? This is a cheque whereby the printed word Bearer on the cheque is cancelled. The cancellation of the word Bearer automatically makes the cheque an order cheque. An order cheque can be paid to the named payee across the bank’s account if so presented.

How do I cash a bearer Cheque?

Bearer Cheque

1. Go to any branch (in the city) of the bank that the cheque belongs to.
2. Present it for clearance.
3. The bank teller, will verify the details on the cheque and clear it.
4. The cheque will be cleared then and there and you will get the cash.

What is self bearer Cheque?

A cheque with or without the words bearer where the drawer and the payee are one and the same is a self cheque whereas those cheques which are payable to bearer and where the drawer and payee are different is a bearer cheque.

What is the difference between self Cheque and bearer Cheque?

A bearer cheque is generally drawn in favour of a payee whose name is not mentioned on the cheque. The bank should not ordinarily insist on the presence of account holder for making cash withdrawals in case of ‘self’ or ‘bearer’ cheques unless the circumstances warrant it.

Can I withdraw cash from another persons Cheque?

Yes, if it is a Self Cheque and the Bearer of Cheque word in the cheque is not crossed by the maker of the cheque. Also if your name is mentioned as the payee, then you will first have to deposit it in your A/c, then withdraw the same.

Can we deposit bearer Cheque?

Bearer cheque can be transferred by delivery and does not require an endorsement. In simple words a bearer cheque refers to a cheque that is payable to the one who presents it at the bank. However, these cheques are risky because they can be misused. In case they are lost, the person who finds the cheque can encash it.

What are the advantages of bearer Cheque?

A bearer cheque has the advantage that when it is passed from person to person, it does not have to be “cleared” every time it changes hands. Most UK cheques now are pre-endorsed “Account Payee”, which means only the account holder named as the Payee can clear the cheque.

What is the validity of bearer Cheque?

As per RBI guidelines, with effect from April 1, 2012, the validity period of Cheques, Demand Drafts, Pay Orders and Banker’s Cheques will be reduced from 6 months to 3 months, from the date of issue of the instrument.