Forms / Types of Cheque

A Cheque (in India) or Check (in US) is a piece of paper that authorizes a bank to take a certain amount of money from your account and pay that amount to another person or business, or to you as cash.

Forms of Cheque

There are two types of Cheque. They are 1) Open Cheque and 2) Crossed Cheque.

Forms / Types of Cheque

 

Open Cheque: An open cheque is payable across the counter of the bank. It can be encashed at the counter of the bank. There are two types of open cheques:

This could be

# Bearer Cheque / endorsement which is either expressed to be so payable (on which the last or only endorsement is an endorsement blank); bearer cheque are to be paid to the bearer of the cheque

# Order Cheque (i.e.) which is expressed to be so payable which is expressed to be payable to a particular person without containing any prohibitory words against the transfer or indicating an intention that is shall not to be transferable (section 18) and

Crossed Cheque is a cheque which can be only collected through a banker. A crossed cheque is one on which two parallel cross lines with or without the word “& Co”, “Not negotiable “, “A/c Payee” etc are drawn. Crossed Cheque will be discussed in detail in the coming post.

Categories: Banking Basics, Tutorials, Types of Cheque