A cheque is a prevalent type of negotiable instrument. You need to have a savings or current account with a bank to write a cheque in your name or on behalf of someone else and tell the bank to pay the specified sum to the person listed on the cheque. Because it could result in major banking fraud, this transaction must be handled very carefully.
The most important criterion for having a chequebook is to have a bank account. By going to the bank or applying online through the bank’s mobile or Net banking application, we can get our chequebooks delivered to our doorsteps.
A cheque is a form of financial documentation that orders a bank to transfer a specific sum of money from one person’s account to another person’s account in whose name the cheque has been made or issued.
Because no actual currency is involved in the transfer method, it provides a safe choice and reduces potential loss or theft.
The person who issued the cheque must have a current or savings account associated with the bank. According to your account type, there are many chequebook types.
A Chequebook is a series of leaves known as a cheque leaf. These pages must be carefully filled with all the required information to ensure an easy and accurate transaction.
A cheque is an essential financial instrument. The public and the business world commonly use it when conducting personal and professional transactions.
Its features are as follows: –
Various cheque types are available in the market according to their desired use. Therefore, we will discuss twelve distinct sorts of cheques in this section.
It’s crucial to write a cheque in a proper manner. Otherwise, its authenticity could be compromised. These easy steps explain what and how to make a cheque.
Step 1: The first step you have to do is take a blank cheque from your chequebook. You can locate the file for writing date in the top corner. The box must be correctly filled. Avoid making any errors.
Step 2: The payee’s name will then be written in the following step. Be careful to pay close attention to every detail when entering any information.
Step 3: Now, after entering the payee’s name, you must write the sum payable. Enter the amount in the box first as numeric and then as words. Be cautious because one more digit put mistakenly could render it unnecessary.
Step 4: The signature comes last. You must double-cheque all the information before signing. Verify that you entered the date and the sum accurately. You can now finish by signing the cheque.
The following will tell us what the cheque’s advantages and disadvantages are:
Advantages of a Cheque
Disadvantages of a cheque
You can apply for a new chequebook in a variety of ways by following any of the methods listed below:
1. Internet Banking: By logging into your internet banking account, you can request a chequebook by providing necessary information such as your account number and mailing address. The chequebook is thereby sent to the address connected to your bank account.
2. Mobile Application: You can also sign in to the mobile app provided by your bank and request a chequebook there.
3. ATM: By simply following the instructions below, you can also apply for a chequebook using an ATM:
4. Branch Visit: Additionally, you can ask for a new chequebook by going to your bank location.
The major components involved in a what we call a cheque are:
After knowing the importance of what a cheque is, the following are some of the points to be kept in mind:
For both modern banks and the general public, cheques are among the most significant negotiable financial instruments. Cheques can be used to avoid carrying cash. Everyone in the world today needs to know what a cheque is. Additionally, to prevent fraud, made using current technology of the MICR band.
Ans: Indian Financial System Number, or IFSC, is an 11-digit alphanumeric code that serves as the distinctive identifier for a particular bank branch.
Ans: Each cheque is printed with a 6-digit unique number.
Ans: No, banks do not accept any overwriting on a cheque.
Ans: Both of them are distinct from one another and serve separate functions.
Before you go…
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.