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How are cheques and cheque books used?

Nicholas Rivera

in Student Loans

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Annie Barnes on August 31, 2018

What is a Check? A cheque is a negotiable instrument that can be issued by a person to pay money to another person or entity. The person to whom the check is issued is entitled to receive the sum mentioned in the cheque (provided the account has sufficient balance) from the bank where the cheque issuer holds his account. What are the important things to note while writing a cheque? There are a number of important things that we must have in mind when you are writing a check. That are detailed below. 1. Remember to Cross the Cheque Crossing a cheque means putting two parallel lines on the left-hand side to the upper-left corner of the check. This means that, the cheque is a Account Payee cheque which means it can only be deposited into another account and cannot be exchanged for cash at the counter. This serves two purposes: you can keep a record of who to cash your check and also make sure that even if the check is lost, it can not be misused by any person. The person to whom the cheque was paid will be recorded. 2. Write the Name of the person to whom the cheque should be paid in its entirety is very important to state the cheque payee's name in full without missing any part of the name in the "pay to" The name entered here must match the name under which the person has a valid bank account. If there is any mismatch or spelling mistake the cheque will not be paid 3. Write the amount to pay, both in numbers and words, it is advisable to write the value of the number, as well as the value of the words in the check. Also care must be taken to ensure that there is no beginning or end of the blank spaces while entering these values which might cause tampering of the cheque and modification of the cheque value of 4. Write the cheque date promptly do not issue cheques that do not have a cheque issue date. 5. Sign the check in the lower right corner exactly with the signature registered in the bank records. If there is even a slight mismatch between the signature in the bank records and that in the cheque the bank will not release the payment.

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