Knowing how to fill a cheque correctly ensures your payments go through without issues and keeps your transactions secure. Following the proper steps in your cheque-facilitated transactions prevents errors that could lead to delays or rejections.
To understand what correctly filling out a cheque entails, read on.
A cheque is a written order that tells a bank to pay a specific amount to a designated person or entity. In India, the Negotiable Instruments Act of 1881 governs all cheques. People often use them for personal and business transactions.
If you fill out a cheque incorrectly, the bank may reject or dishonour cheque, causing processing problems.
Also Read: What is Cheque Leaf?
Each type of cheque serves different purposes and offers varying levels of security and flexibility. Here are a few types of cheques you need to know about:
A bearer cheque is cashable by anyone who presents it at the bank. It may not specify a payee’s name. That makes it easily transferable but it’s less secure.
An order cheque is payable only to the named person. The payee must endorse it on the back to deposit it. That adds a layer of security to the transaction.
A crossed cheque has two parallel lines at the top left. It is used to deposit funds directly into a bank account and not cashed directly. That prevents unauthorised cash withdrawals.
Post-dated cheque is issued for a future date. You cannot cash it until that date arrives. People often use it for scheduled payments and budgeting.
Before you fill out a cheque, you need to understand the various sections that a cheque has. These include:
Also Read: 5 Important Facts of Account Payee Cheque
Here is a sample example of writing a cheque for your reference.
Figure 1
Filling out a cheque consists of two main parts: writing the cheque and recording the payment. Follow these steps to ensure accuracy and prevent dishonour by the bank.
It is mentioned in the top right corner in the format “DD/MM/YYYY.” You can also create a post-dated cheque if needed.
Write the payee’s name, who can be an individual or a business. Ensure you spell the name correctly.
In the designated space for ‘Rupees,’ write the amount in words starting from the left side. Include the word ‘only’ after the amount to prevent tampering. For example, write “four thousand and four ‘only’ if you wish to write a cheque for ₹4,004.
In the box on the right side, write the same amount in numerals, formatted as ‘4004/-’.
Mismatched or incorrect signatures can result in the cheque being cancelled or deemed invalid. Sign the cheque using the same signature you use for other banking transactions.
Filling out a cheque accurately helps you to build trust with lenders when applying for loans. It allows you to avoid charges if your cheque bounces due to an error. This makes it a secure and simplified option for fund transfer.
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No, there is a specific format for updating the date on a cheque. You need to write the date in the format ‘DD/MM/YYYY’ only.
In such cases, it is often best to write a new cheque to avoid any issues.
Although it is not necessary, it is best practice to use this sign after the amount in numbers. The ‘/-’ sign indicates an endpoint to your written amount. It helps prevent tampering and clarifies the amount.
Yes, blank signed cheques are likely to be misused. Avoid leaving cheques blank and store them securely to prevent fraud.
A post-dated cheque has a future date and is not cashable until then. People commonly use it for scheduled payments and budgeting, such as paying rent as tenants.
In India, a cheque is valid for three months from the date mentioned. After this period, it is considered stale and may not be acceptable for payment by the bank.
If you sign a cheque and your signature does not match the specimen signature held by the bank, your cheque will be void.
