A Cheque is an important bank instrument which is negotiable and can be transferred by only hand delivery. One can make a safe and convenient payment using a Cheque as it’s less risky and prone to loss
Cheque is a document in writing which contain an unconditional order, addressed to a banker, signed by the person who has deposited money with the same banker, and needing him to pay on demand a sum of money only to or to the order of certain person or to the bearer of cheque.'
Different Kinds / Types of Cheques
1. Bearer Cheque
This type of cheque is not cancelled and the words 'or bearer' appear on the face of the cheque, is called a bearer cheque. It is payable to the person specified therein or to the person who deposits it to the bank for payment. However, such cheques can be said risky, this is because if such cheques are lost, the finder of the cheque can collect payment from the bank.
2. Order Cheque
When the cheque is cancelled, the word 'bearer' and when in its place the word 'or order' is written on the face of the cheque, the cheque is a type of an order cheque. Such a cheque is payable to the person specified therein as the payee, or to any one else to whom it is transferred.
3. Uncrossed / Open Cheque
A cheque is known as an 'Open Cheque' or an 'Uncrossed Cheque' if it is not crossed. The payment of such a cheque can be obtained at the counter of the bank. An open cheque may be a bearer cheque or an order one.
4. Crossed Cheque
Drawing two parallel lines on the face of the cheque along with or without any additional words like '& CO.' or 'Account Payee' or 'Not Negotiable'Crossing of cheque meant to be a crossed cheque. A crossed cheque can only be credited to the payee's account and cannot be encashed at the cash counter of a bank.
5. Anti-Dated Cheque
A cheque is called as 'anti-dated cheque' if a cheque bears an earlier date than the date on which it is presented to the bank. Such a cheque is valid upto three months from the date of signing of the cheque.
6. Post-Dated Cheque
A post-dated cheque is a cheque that bears a date which is yet to come. A post dated cheque cannot be honoured earlier than the date on the cheque.
7. Stale Cheque
A stale cheque is not honoured by the bank. A cheque is a stale cheque when it is presented after three months from the date of the cheque for payment.