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Banking Topics Cheques and its Types |Download Banking Notes

Banking Topics Cheques and its Types |Download Banking Notes
Cheque
It is an instrument in writing containing an unconditional order, addressed to a banker, sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or to the order of certain person or to the bearer of instrument."

Types of Cheque

1. Bearer Cheque or open Cheque
When the words "or bearer" appearing on the face of the cheque are not cancelled, the cheque is called a bearer cheque. The bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment. However, such cheques are risky, this is because if such cheques are lost, the finder of the cheque can collect payment from the bank.
Banking Topics Cheques and its Types |Download Banking Notes

2. Order Cheque
When the word "bearer" appearing on the face of a cheque is cancelled and when in its place the word "or order" is written on the face of the cheque, the cheque is called 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 endorsed (transferred).

3. Crossed Cheque
Crossing of cheque means drawing two parallel lines on the face of the cheque with or without additional words like "& CO." or "Account Payee" or "Not Negotiable". A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee's account.

4. Anti-Dated Cheque
If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "anti-dated cheque". Such a cheque is valid upto three months from the date of the cheque.

5. Post-Dated Cheque
If a cheque bears a date which is yet to come (future date) then it is known as post-dated cheque. A post dated cheque cannot be honoured earlier than the date on the cheque.

6. Stale Cheque
If a cheque is presented for payment after 3 months from the date of the cheque it is called stale cheque. A stale cheque is not honoured by the bank.

7. A self cheque
A self cheque is written by the account holder as pay self to receive the money in the physical form from the branch where he holds his account.
8. Crossed Cheque : A cheque which carries too parallel transverse lines across the face of the cheque with or without the words “I and co”, is said to be crossed.

9. Gift Cheques : Gift cheques are used for offering presentations on occasions like birthday, weddings and such other situations. It is available in various denominations.

10. Traveller’s Cheques : It is an instrument issued by a bank for remittance of money from one place to another

11.Self cheques:

(1) Check issued by a drawer to himself or herself, or 
(2) Check presented for collection at the bank on which it was drawn.
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