written by | April 26, 2022

Account Payee Cheques: What Do They Mean?

Cheques are a popular way of paying in India since they are secure and simple. Individuals are generally perplexed by numerous cheques, like crossing cheques, holder paycheques and ac payee cheques. For a more profound grasp, let us discuss below thorough details regarding account payee cheques, their purposes and how they vary from all other kinds of cheques.

Did you know?

The account payee cheque secures your transfer as the payment can only be deposited in the payee's account. 

What Is an Account Payee Cheque?

The APC is a super security form of cheque since one can put money only into the payee's accounts, and the recipient does not have permission to mark this cheque for anybody else. To further understand the notion, one must first distinguish among the three terms mentioned below.

  • Drawer: A drawer is an individual who writes and does the signature on the cheque. Typically they are the individual from whose account the receiver withdraws the funds, which shows the authorised sign for that account.
  • Drawee: The drawee is the person or entity to which one writes the cheque. The banks are usually the drawee, and the drawers instruct the banks to withdraw the money.
  • Payee: A payee is a person or entity to whom you make the actual payment, and their name appears on the cheques.

As a result, in an APC, the bank makes the payment solely by transferring it into the payee's accounts.

How to Write an Account Payee Cheque?

  • To draft an account payee cheque, draw two lines diagonally on the left edge of the cheque and cross it. Further, it requires you to mention there as "Account Payee" across the two lines drawn.
  • Note that if you merely draw lines on the cheque without writing "Account Payee," the bank will consider it a cancelled cheque rather than an account payee cheque.
  • A crossover cheque differs from an APC in several ways. As a result, no one should mistake it for the final.

Also Read: Know All About What Is a Cheque Leaf

What Is the Significance of an Account Payee Cheque?

The primary factor for the popularity of drafting an account payee cheque is that this is the safer type of cheque.

  • Because the bank makes the payment only into the payee's account, there is little danger of misappropriation.
  • Furthermore, the payee cannot sign the cheque to anybody else, which adds to the security of such payments.
  • Another thing to keep in mind concerning account payee cheques is that they are only valid for a quarter (3 months).
  • Make sure that you do not overwrite anywhere on the cheque. 

How Is an Account Payee Cheque Different from Other Cheques?

The definition of an account payee cheque is discussed above. Below are the definitions for other different kinds of cheques.

  • Crossed Cheque

This is a type of cheque in which the bank deposits the amount directly into the payee's account. Nevertheless, in this type of cheque, the payee can give the approval or authorisation for the third party, and further, the third person can recommend it to somebody else. You can complete such recommendations by mentioning the endorsee's name on the cheque and providing your signature on the reverse side of the cheque.

  • Bearer Cheque

Except if the phrase bearer is cross or there is any other kind of mark, each cheque is just a bearer's cheque. The individual holding the cheque can redeem it across the countertop. This sort of cheque is highly insecure. If it is missing, one can easily exploit it. Furthermore, there is no requirement of endorsing these cheques, and they may be quickly given to a 3rd party.

  • Order Cheque

An order cheque has the term 'Bearer' crossed out and the word 'to Order'. This form of the cheque has comparable properties to a bearer cheque, but one cannot endorse it simply by giving it over to somebody else. One must sign and approve it to make it valid.

Regarding the signature, an account payee cheque differs from a crossover cheque and the order cheque, but it is opposed to holder verification. A holder cheque is perhaps the most prone to fraud, but an APC is a very safe document. It is essential to understand the various methods of drawing the line on cheques to fulfil the proper task.

  • The crossed cheque has two crossings on the upper left edge.
  • Account Payee cheque comprises two crossings and the word "Account Payee".
  • Non-negotiable are two crossings and have the words "Not Negotiable" on them.

Other excellent practices to follow when writing a cheque are as follows:

  • Don't leave a lot of blank spots.
  • Always draw a single line over the empty spot so that no one fills anything else in it again if it is misplaced.
  • Every time draft a crossover or account payee cheque to ensure that the money reaches the intended recipient.
  • Delete the phrases "or Bearer" out from the name area if you do not wish to crossover the cheque.
  • Should use the notation "/-" wherever the numerical value stops. So that no one else adds any more numbers to it.

How to Deposit or Encash A/C Payee Cheque

Whenever you get an APC, keep in mind that you cannot cash it at the countertop. You must deposit it into your savings account using the cheque deposit form. To begin, complete the cheque deposit form with all of your information. Clip that to the cheque and hand it over to the customer service agent or place it inside the cheque deposit box. Within some days, the bank will transfer the money to your account. This is how you can encash an account payee cheque.

Please keep in mind that you must write the savings account and contact detail on the reverse side of the cheque. Bank will deposit the amount in the proper account even if, in any case, the deposit form misses.

Clearing of AC Payee Cheque

Whenever you submit an account payee cheque at your institution and once the reimbursement process completes. It is necessary to go through a procedure among these two, and we may call it the cheque clearing procedure. This process is as follows:

  • First, the payee visits the bank and deposits his cheque in the bank.
  • Once you submit the cheque, the bank will complete the process and inform the drawer's bank to make the payment. They even scan the cheque and send it to the drawer's bank.
  • After receiving the request, the drawer bank will start the process and examine the sign, and after confirmation, the bank will complete the payment. The receiver will get the amount only if money is in the drawer's account.
  • After the payment, the payee bank will deposit the amount into his account.

What Is the Account Payee Cheque Clearance Time?

It takes two business days for most cheques to clear. Cheques may take longer to clear depending on the amount, your relationship with the bank, or whether it's a one-time deposit. When the money become accessible, you will receive a receipt from the teller or ATM.

Also Read: Get Complete Information on Cheques in Detail

Terms Used to Understand Cheque Transactions

  • Endorsement

The transmission of a cheque between one individual to the following individual and this process you can refer to as an endorsement. As previously indicated, you could only sign the crossed cheque. Whenever the recipient of a cross cheque has to make a payment, he\she can shift the cheque to his\her creditor. He\she must enter the endorsing guidelines on the reverse of the cross cheque to accomplish this.

  • Clearance

After you deposit the cheque, the banker completes the process and delivers the amount to the payee. You can call this entire procedure a clearance. A clearing facility receives and processes information and pictures of cheques electronically from banks, and it passes the procedure over to the other bank. As a result, it serves as an intermediate between the banking institutions for cheque clearance.

  • Crossing of the Cheque

It is two parallel lines on the upper-left edge of a basic cheque. You cannot cash these cheques at the desk. However, you may only do so with the money in your accounts.


The above considerations show that drawing two lines on a cheque( crossing it), regardless of it being general or particular, fulfils the function of keeping the cheque secure by severely restricting an individual without a right to get payments upon that. Non-negotiable and APC are among the most trustworthy crossing techniques because they give an additional degree of security.

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Q: Is endorsement possible in account payee cheque?


No, one cannot endorse the account payee cheque.

Q: What is a cheque?


A cheque is a documentation that you may give to your banks that instructs them to transfer the stated quantity in figures and letters to the individual whose name appears upon that cheque.

Q: Where is the account payee mentioned?


One can mention " account payee " between the two lines on the upper left side of the cheque. One can mention "account payee", and the words one must write on it are Account Payee or A/C payee.

Q: How long does it take to pass a cheque?


Usually, banks clear it in 2 business days, and the TAT for the bank is not more than five days.

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