Account Payee Cheque: 5 Important Facts to Know

An account payee cheque is also referred to as a crossed cheque. This kind of cheque has the following words ‘A/C Payee’ mentioned on the top-left side written between 2 parallel lines. Despite technological advancements in the financial vertical, cheques continue to remain a popular way of initiating transactions.

One of the main reasons for this is its simplicity and security. However, if you are new to banking, you may not be familiar with a payee cheque. To get a gist of the account payee cheque meaning and significance, read on.

What is an Account Payee Cheque?

This type of cheque differs from a regular one because it can only be deposited into the recipient’s account. This means that you cannot withdraw cash using the cheque. What’s more, you can deposit the cheque into the account of the specific recipient and not anyone else’s account.

This secured cheque contains three main elements:

• Drawer: The account holder who writes the cheque and whose account is debited
• Drawee: The bank to which you write the cheque with the instruction from the drawer to debit the account
• Payee: The recipient to whom the drawer transfers money and the person the cheque is addressed to 

What are the Key Features You Can Find in an Account Payee Cheque?

One of the most essential features is the two parallel lines drawn on the left corner of the cheque. These lines provide a clear indication that you cannot cash it and the amount will be deposited into your account.

In fact, it is one of the added security measures that help prevent fraud or misuse of the cheque. When the drawee writes a cheque to the payee, the amount mentioned on the cheque will be debited from the former’s account to the payee’s account after the cheque is realised.

How to Write an Account Payee Cheque?

Creating an account payee cheque is simple. Just follow the steps mentioned below.

• Write the date correctly on the cheque
• Mention the payee’s name in the ‘Pay’ section
• Provide the cheque amount in the numeral form and in words
• Draw two parallel lines on the top left corner of your cheque
• Sign the cheque on the bottom in the required area

Make sure to enter the details accurately, as any mistake can delay the process. 

How to Deposit an Account Payee Cheque?

You can deposit the cheque by following this process:

• Sign on the back of the cheque to endorse it

• Visit the bank with your ID, cheque and account number
• Fill in the details on a deposit slip mentioning your account number and cheque amount
• Submit the cheque along with the deposit slip to the bank representative
• Get the amount credited to your account after the cheque has cleared

The cheque clearance process may take up to 3 working days, provided the details are mentioned accurately and the drawer has sufficient funds in his account.

What is the Significance of a Payee Cheque?

This type of cheque is secured as the bank initiates payment only in the account of the payee. As a payee, you cannot entrust anyone else to receive funds and this feature actually works to boost safety. Another crucial factor is that these cheques are valid only for 3 months or 90 days.

Knowing the essential features of an account payee cheque is crucial to help you manage banking transactions hassle-free. Whether you need to clear your credit card bills or pay your loan EMIs, you can use this type of cheque.

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FAQs on Account Payee Cheques

How to make a cheque as an account payee?

You can make a cheque as an account payee by drawing two parallel lines on the left top of a cheque.

How do I encash an account payee cheque?

You can encash the cheque by following the process mentioned below:

• Fill in the encashment form by providing the required details
• Attach this form along with the cheque and your ID proof
• Receive the amount in your bank account after clearance

It is important to visit the bank wherein the account holder maintains their account and where the cheque has been issued.

Can you cash a cheque that says account payee only?

No, it is not possible to cash a cheque which has an account payee or is a crossed cheque. This clearly implies that the amount can only be deposited in the account.

Can an account payee cheque be encashed by any person?

No, these cheques are highly secure and cannot be encashed by anyone. The amount will be deposited in the recipient’s bank account only.

Who is a payee in a cheque?

A payee is the recipient who receives the amount for a particular transaction.

What is the validity of an account payee cheque?

The validity of the cheque is 3 months or 90 days.

How long does it take for an account payee cheque to clear?

If the cheque belongs to the same bank as yours, it gets cleared within the same day. If the cheque is from a different bank, it takes up to 3 working days for clearance.