Features of a Cheque

As we know that Cheques are reliable, convenient, and widely accepted by businesses (although proper identification may be required). There so many features of a Cheque.

The following are the important features of a cheque:

   # It is an negotiable instrument in writing. It may be hand written by ink or typed or printed but writing in pencil is not allowed.

   # No stipulatory conditions should be there (i.e., an unconditional order)

   # A Cheque must be drawn on specified bankers only. A cheque contains

the name of the bank and place of the branch.

   # It should be for payment of certain sum of money only. In other words the amount specified must be certain & payable only in money.

# This could be drawn on the same or a specified person or legal entity/legal person.

# The amount specified in the cheque should be payable on demand only.

# The specified amount should be written in words as well in numbers also.

   # Date in Cheque: Without date, cheque is not valid. There can be anti-dated or post-dated – say if you sign a cheque on 10^th August, if you put the dated on top as 10^th July, it is anti-dated cheque and if you put on top as 10^th September, it is post dated, the banker will give money on or after 10^th September only.

   # The Drawer should sign a cheque and that signature should resemble/match with the specimen signature.

Categories: Banking Basics, Features of a Cheque, Tutorials