Plain-English definitions of cheque terms, from crossed cheques to positive pay.
22 articles
Strike out "or bearer" and the cheque becomes payable only to the named payee. One pen stroke, materially safer.
Magnetic Ink Character Recognition — the stylised digits along the bottom of a cheque that machines read. Never print over them.
Telling your bank not to pay a cheque you have already issued. Act fast, and have the cheque number ready.
Three parties, three roles. Worth getting straight, because bank correspondence uses these words and assumes you know them.
A manager's cheque, banker's cheque or pay order is drawn by the bank on itself and paid for up front, so it cannot bounce for funds. When you need one, how it differs from a demand draft, validity, cost and cancellation.
A multicity or payable-at-par cheque is treated as local at every branch of the issuing bank. What the RBI required in 2012, how CTS and the national grid made most cheques at par, charges, and when it still matters.
A cheque is a promise against your balance. A demand draft is already paid for, so it cannot bounce for want of funds.
What banks charge when a cheque bounces — and why the charge is usually the smallest part of the cost.
The unique serial on each leaf. It is how a cheque is identified, tracked and stopped, and it also appears in the MICR band.
A crossed cheque can only be paid into a bank account, never handed over as cash. Two parallel lines across the corner are what make the difference.
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