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Parts of a Cheque
Bearer Cheque
• If a drawer orders the bank to pay a stated sum of money to the bearer it is called a
bearer cheque
• Any person who lawfully possess a bearer check is entitled to receive payment of that
check
• The cheque can be marked "cash," without naming anyone in particular
Order cheque
• If a cheque is to the order of a person in whose favor cheque is drawn it is called an order
cheque
• The order cheque is paid by the bank only when the bank is satisfied about the identity of
the payee
Crossed cheques
• It is written in the same as that of bearer cheque but issuer specifically specifies it as
account payee on the left hand top corner or simply crosses it twice with two parallel lines
on face of the cheque
• It cannot be paid on the counter of the drawee bank
• It will be deposited in the account of a person in whose order or favor it is drawn
• It means that it could only be deposited and could not be converted into cash
Stale Cheque
• If any cheque issued by a holder does not get withdrawn from the bank till three months,
then that type of cheques are called stale cheque
Cashier's Cheque
• This check is also known as an official check, treasurer's check or manager's check
• The promise to pay is made by the bank, not the person using the check.
• This type of check is guaranteed and is often treated the same as cash
• The bank will debit your account or you can pay in cash for the amount of the check
• The check is then written by the financial institution and signed by the institution's cashier
or manager