Home » Discuss the various types of cheques which can be drawn from any bank

Discuss the various types of cheques which can be drawn from any bank

Discuss the various types of cheques which can be drawn from any bank.

Answer

Common types of cheques which can be drawn from any bank:

  • Bearer Cheque: This cheque is payable by the drawee bank over the counter to the Bearer or presenter of the cheque. A bearer cheque can be negotiated or passed to another person by mere delivery.
  • Order Cheque: When the word “bearer” on the cheque is cancelled, it becomes an order cheque. Such a cheque is paid to the person specified therein as the payee. The payee can be anyone else too, to whom the cheque is endorsed.
  • Open Cheque: An open cheque is a cheque that is not crossed on the left corner and payable at the counter of the drawee bank on presentation of the cheque. An open cheque may be bearer or order cheque.
  • Crossed Cheque: A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed. A common instruction is to specify that it must be deposited directly into an account with a bank and not immediately encashed by a bank over the counter. Crossed cheque means drawing two parallel lines on the upper left-hand corner of the cheque and writing the words ‘A/c Payee’. The main advantage of this cheque is that if the cheque is lost, nobody can take the payment. In case of any misuse, it can be easily found in whose account the payment is credited. So it is advisable to cross the cheque always.