How to Write a Cheque – Correctly

The world of finance and banking can be a daunting one. Especially, if you have only just started handling your very own bank account as well as credit card, and are looking to start using your money wisely. It is all about getting your basics right, and voila you are rich! Here, we focus on…

The world of finance and banking can be a daunting one. Especially, if you have only just started handling your very own bank account as well as credit card, and are looking to start using your money wisely. It is all about getting your basics right, and voila you are rich!

Here, we focus on the correct methods to write a cheque so that you do not have to worry about your money going elsewhere or your cheque getting revised.

First of all, what is a cheque?

A cheque is a written form of money transfer between two bank accounts, and sometimes an authorization to obtain direct cash.

When do we need a cheque?

A cheque is usually required to transfer a large sum of money between two bank accounts or between an individual and a bank account.

How to write one?

It is important to enter the correct details in your cheque leaf so that it does not get returned or considered invalid.

Here are some easy to follow steps to write a cheque correctly:

Step 1: Enter the Date

  • In the top right corner of the leaf you will find the slot to enter the date in the format: dd / mm / yy.
  • Usually a future date is entered, whatever date is entered, please be aware that the validity of it is not longer than 3 months of the date mentioned.
  • If you are entering a future date, try to ensure that your account will have the specified money on that date.

Step 2: Enter the payee's name

  • In the line after the word 'pay', enter the name of the person or organization you wish to pay.
  • If you are sure of the person who is going to receive or encash the cheque, then you may allow the bearer word to remain as is. Or you could strike it out.

Step 3: Enter the sum in words

  • Make sure you use the correct spelling when you enter the amount in words.
  • Also, include the word only at the end. This is mainly to ensure that nobody can change what you originally wrote. For eg, Twenty Five Thousand Rupees Only.

Step 4: Enter the value in numbers

  • In the box towards the bottom right of the cheque, enter the value of the amount you wish to transfer.
  • After you write the value in numbers, attach a slash and a hyphen at the end of it. For instance, Rs.25,000 / -.

Step 5: A / c payee

  • If you do not want the receiver of the cheque to encash immediately, but want to transfer it to the account, then on the top left corner of the cheque, draw two parallel lines above and below the word “a / c payee”.

Step 6: Signature

  • You will have to sign at the bottom right corner of the cheque, right above where your name is printed.
  • Make sure that your signature is not too different when compared to the signs in the previous transactions. Although banks do allow room for certain variations, make sure you are fully aware of the way you sign.

How to write a self-addressed cheque?

If you are addressing a cheque to yourself, all you need to do is write “self” in the pay line.

Mistakes to be avoided:

There are several mistakes one tend to make while writing as well as cashing a cheque. But, with a little bit of practice, these common mistakes can be avoided.

  1. Always write a valid date
  2. Ensure there is money in your account at the time of transfer.
  3. Hand over the cheque to a trusted source.
  4. Never strikethrough or overwrite at any point in the cheque.
  5. If you wish to hide the account number (which is printed in the checks), use a permanent marker to hide the printed number.
  6. If you are cashing in a self addressed cheque make sure you write your name and account number as well as your mobile number behind the cheque leaf.

It is necessary to stay clear of these common mistakes as a cheque reject or bounce can reflect badly not only on you, but also your credit history – especially if you are paying monthly installments for your loan or for a business transaction.