Cheques are the most common way to pay money, especially when the amount is over ₹20 thousand in Indian rupees. However, you can also write a cheque for smaller amounts. This practice was in place before the advent of digital payment methods, and businesses now use it to make payments on a forward date and are more like a dated promissory note. Thus, it is vital to know how to write a cheque to someone the right way. Let’s discuss what factors should never be overlooked and the right way to fill out all the necessary fields on a cheque.
Did you know?
Cheques are also called e-cheques since 2018, when amendments were made to banking processes under the IT Act and Negotiable Instruments Act.
What is a Cheque?
A cheque is a paper method to access your bank account and pay a specific amount to a person, company, or firm.
- When presented to the bank, a cheque goes for collection to the issuer’s bank. The process is called clearing.
- If cleared, the amount is paid to the receiver’s bank account.
Thus, you can access your bank account, transfer funds, withdraw money, and deposit money into your account using a cheque.
You can make secure, safe, and convenient cheque payments without handling cash. And, the best part about a cheque is it is easy to learn how to write cheques. It is a reliable option to make payments and keep your financial records. However, you must be careful when you issue a cheque and learn how to write a cheque in India. A mistake can land you in legal and unnecessary trouble.
Parts of a cheque
Now let us come to the cheque itself. There are many important parts to a cheque. To write a cheque correctly, you must know its elements and fields. So, let’s begin with how to fill cheques.
- The bank’s name is also called the payee bank or drawee bank, for example, State Bank of India.
- If the top left corner has two lines across the edge known as a crossing, then it is a directive to the payee bank to credit the amount due into the receiver’s bank account only. Most people write “A/c payee” between the two lines to ensure the money is credited to the bank account and works as an automatic receipt.
- The ‘Pay’ section has a space to enter the payee’s name. When filling this field, ensure you spell the name correctly and enter the drawee’s bank account. After writing the name, draw a horizontal line to fill the remaining space. This ensures no changes can be made to the title or name of the person you are paying.
- On the right-hand side is the ‘date’ field or section. You must enter the date here, and this date will be the date on which you want the money transferred, paid or debited. The cheque is called a post-dated cheque when you enter a future date.
- Ensure you cross the cheque or negate the bearer option to ensure that no cash is paid against it if your cheque is stolen. Instead, it can only be debited to the receiver’s bank account.
- The next important field is the ‘amount’ field, where you should mention the amount you are paying in words. To avoid any alterations, draw a horizontal line across the remaining space in this field.
- Also, learn how to write amount in cheque and the amount in figures and make sure both the figures and amount in words are the same. Any difference in the amount can mean your cheque is returned unpaid.
- While entering the amount in figures, start writing as close as possible to the box edge to prevent any number inserts. Again after writing the amount, make sure you enter ‘/-’ to prevent misuse of your cheque or alterations by adding zeros.
- You must then sign your authorised signature in the bottom right corner of the cheque as the cheque’s drawer.
- The bottom left corner has a unique cheque number known as its serial number. Every cheque will have a serial number encoded from the bank’s identifying number and cheque number.
- It also has the drawer’s account number mentioned here.
- The MICR or Magnetic Link Character Recognition Code is like a barcode. It helps identify the bank uniquely along with its branch or issuing bank details and the last 2 digits forming the transaction ID.
Now that we know the various fields of a cheque let us move to how to write this the right way or the correct way.
Also Read: All About UPI– United Payments Interface
How to write a cheque?
Remember how to fill a cheque in India pointers in mind every time you write a cheque.
Avoid spaces between numbers and words
Try not to leave spaces in the name, amount or figures denoting the amount, as this allows any other person to alter the cheque. For example, here is how to write cheque amount in words in India. 1000 can become 10000 with just the addition of a 0 next to it, or Nagaraj KP can become Nagaraja KP when it is written as Nagaraj KP with sufficient space to insert the alphabet “a”.
Write names like Anu Malhotra and not Anu Malhotra, and so on. Remember this every time you write a cheque. Not leaving spaces, using the /- at the end of figures, and drawing a horizontal line immediately after the name can ensure that no one can wrongly utilise your cheque by adding zeros, alphabets etc.
Ensure you cancel the words “or bearer” and enter a/c payee with a crossing
When you omit this important procedure, the cheque can be directly encashed at your bank. Such a cheque authorises payment to the person or bearer of the cheque. By ensuring this detail, you make sure that only the drawee is paid, and if you have mentioned a crossing, the amount is paid only to the receiver’s account. This aids in saving your money even if the cheque gets stolen.
Add ‘only’ after you enter the amount in words
Writing one word can make a huge difference when writing a cheque. You must fill in the amount in words and add ‘only’ after that. For example, if you enter the amount as Twenty thousand and forget to enter ‘only’, the chances are that the cheque can be altered to read Twenty Thousand Nine Hundred and Ninety Nine quite easily. That’s the reason why it is also imperative to add the /- sign after the figures, as 20,000 can easily be altered to 20,000,000, which is a huge sum you can become liable to pay! The right way to enter it is Twenty Thousand Only and 20,000/- respectively.
Do not overwrite
Be careful never to overwrite any details in your cheque. You must never scribble, cancel a word etc., on the cheque as the bank is at liberty to refuse to accept the cheque. If you make a mistake in the cheque writing format, you can always write out a new cheque. Take your time and never write cheques in a hurry.
Enter the correct date
Ensure you fill the date field with the right date when you do cheque writing. Not entering the date means your cheque can be drawn on any date as per the person holding the cheque wills. Your cheque can bounce, or you can face other penalties when the cheque is encashed, and you do not have sufficient funds in the account. Also, note that the bank does not accept cheques with a future date or no date. Even entering the year or month incorrectly can cause your cheque to bounce.
Don’t sign on the MICR code
Your signature should be appended at the right lower corner of the cheque just above the field ‘Authorized Signatory’. Signing on the left corner defaces the cheque because the bank’s numeric identifier is mentioned in the MICR barcode. Knowing how to write in cheque is important. Or your cheque is liable to bounce when you sign over the MICR code. This is also one of the most common errors people make when writing cheques.
Maintain your cheque records
Maintaining a record of every cheque you write can be very helpful in the long run. It is easy to note the cheque number, amount, date and the name of the person you issue the cheque to. You can thus make sure if your cheques clear your account, keep a watch on any fraudulent or suspicious activity related to your cheques and bank account. You can also avoid any confusion in how to write a cheque due to forgetting the cheque details just in case you need to stop the cheque’s payment or issue a duplicate cheque.
Safety Measures to adopt when cheque writing
The above methods are a must when you learn how to write a cheque in India. You must ensure proper safety measures in cheque writing. Here’s what you can do for a safe experience in writing cheques correctly:
- Put transparent tape over the name field and amount field before issuing the cheque so that no one can alter your cheque.
- Destroy cancelled cheques unless you need them for some other reason.
- Mention your name, account details, mobile number, and signature at the back of the cheque whenever you deposit a cheque for collection.
- Ensure you never issue a cheque unless it is written rightly and has the date, amount, name of the person the cheque is issued to and the account number.
- Ensure your account has an adequate balance before issuing a cheque. A cheque bounce is a criminal offence with severe legal consequences.
- Use your signature judiciously. If you doubt the signature may not be acceptable, sign again to prevent any confusion. Do not strike out the previous signature.
- Never staple, fold, or disfigure the cheque’s face and MICR code.
- Desist from issuing post-dated cheques and cheques that are dirty or defaced.
- Use the same pen throughout when writing a cheque. Also, never use green or red-inked pens.
- Make sure your handwriting is consistent and legible when writing a cheque.
The process of how to write a cheque to someone sounds easy. However, there are various elements to a cheque. Whether it is a personal account or business account, always ensure you write your cheques correctly. Maintain all the aspects in a cheque as mentioned in this article and abide by the preventive measures. Be patient when writing a cheque and always double-check before submitting.
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