What is an Account Payee Cheque & How It Works?

All you need to do is download our Personal Loan App or register on the Fibe website to get funds quickly and easily. If the drawer has funds available in the account, it may not take up to 4 days for the cheque to get cleared with accurate details. Below listed are some of the key features of AC payee cheques. Cheque has been used by almost everyone at one time or the other. Whenever payment is made by cheque, the name of the recipient, the amount to be transferred along with bank details are given and signed. These simple steps will make your crossed cheque more secure and give you peace of mind in your financial transactions.

Safety Measures to adopt when cheque writing

Payees must deposit this into their bank accounts, providing an additional layer of security and reducing the risk of fraud. A crossed cheque, easily identified by two parallel lines drawn across its face, adds an essential layer of security. The crossed cheque stipulates that its proceeds can only be paid into a bank account, thus prohibiting direct cash encashment. A bearer cheque becomes an account payee cheque by writing “Account Payee” or crossing it twice with two parallel lines on the left-hand side top corner.

Bank Offer

It is a cheque drawn in favour of a payee’s bank account that instructs the bank to transfer funds directly to the named person’s bank account. Yes, you can cross a post-dated cheque if you are the drawer. The crossing ensures that even though the cheque becomes valid for processing, it can only be deposited into a bank account and not cashed over a bank counter.

For a modern, professional, and more efficient approach, cheque printing software automates this process entirely. The correct placement for indicating “A/C Payee Only” on a cheque is the top left corner. Draw two parallel lines there and neatly write “A/C Payee Only” in between. If convenient, you can also use a stamp with the same wording, ensuring that the imprint is clear and legible for banks to recognize the instruction. Write “Account Payee” between the parallel lines to further specify that only the payee can deposit the cheque.

Put your signature on the reverse side of the cheque, endorsing it for deposit. Write your name, account number and contact number on the reverse side of the cheque. Write names like Anu Malhotra and not Anu  Malhotra, and so on. Remember how to fill a cheque in India pointers in mind every time you write a cheque. 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.

Different Types of Crossing Cheques

• These cheques build trust in financial transactions, helping create a reliable banking system.
• Except if the phrase bearer is cross or there is any other kind of mark, each cheque is just a bearer’s cheque.
• Furthermore, there is no requirement of endorsing these cheques, and they may be quickly given to a 3rd party.
• The only permissible action is for the payee to deposit the cheque into a bank account in their name.
• Individuals are generally perplexed by numerous cheques, like crossing cheques, holder paycheques and ac payee cheques.

When you issue an account payee cheque, the payee must deposit it in their bank. The bank clears the cheque by transferring funds from your account to the payee account mentioned on your cheque. An account payee cheque is a special cheque identified by two diagonal lines on the top left corner with “Account Payee” written.

The back of the crossed cheque can be signed to obtain cheque endorsing assistance. However, once the account payee is written, the cheque cannot be endorsable. If the cheque’s payee is unable to visit the bank, he may choose any other individual to receive the money.

What is the limit of the account payee cheque?

It is a type of crossed or accounts payee cheque but it is post-dated to meet the obligation at a future date. This transaction has to be handled very delicately as it may lead to some serious banking fraud. A cheque is an important document that individuals, companies, governments, and others use to transact their business. There are various types of cheques used in our banking system, which have certain protocols that we need to follow while writing a cheque. Hope you have found better clarity in the rules and guidelines to be followed before writing cheques. After taking the above safety measures your cheque will work well.

• Cheques are a popular way of paying in India since they are secure and simple.
• Once the cheque deposit is made, the payee bank verifies the deposit slip and the cheque and sends it to the drawee for clearing.
• It is two parallel lines on the upper-left edge of a basic cheque.

In most of the cases, you can deposit a payee cheque in any bank branch. However, you need to write the words ‘Payable at Par’ on the cheque. You can make a cheque as an account payee by drawing two parallel lines on the left top of a cheque. Do you know what is the meaning of A/C Payee and Cheque Endorsement.

Parties Involved in an Account Payee Cheque

It is important to note that the check is only valid for a total of 90 days. One of the main reasons for choosing cheques as a payment option is because of the security and the simplicity. If you are not aware of what is a payee cheque, read on to know all its key a/c payee features and benefits.

This marking signifies the cheque cannot be cashed at a bank counter but must be deposited into a bank account, ensuring a secure transaction to the payee’s account only. The drawee is the bank or financial institution where the drawer holds their account. When a cheque is presented for payment, it is the drawee’s responsibility to process it.

Rules to follow before signing a cheque.

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. A cheque is written to instruct the bank to pay the specified sum to the payee named on it. It can be written by both current account and savings account holders and is very helpful in carrying out transactions in a much more efficient and easy way. The date, amount, the account holder’s signature and the payee’s name must all be included on a cheque for the bank to begin processing the payment.

In this case the money will not be credited to any other account other than the mentioned bank account. In India, account payee cheques are governed by the Negotiable Instruments Act of 1881. The act provides legal protection to the payee in case of disputes or cheque dishonours.

When you issue an A/C Payee cheque, you must write “A/C Payee” or “Account Payee” between two diagonal lines on the top left corner of the cheque. This ensures that the cheque can only be deposited into the account of the payee and cannot be cashed. An A/C Payee cheque is a type of cheque that can only be deposited into the bank account of the payee. In other words, the cheque cannot be cashed, and the amount can only be credited to the payee’s bank account. You must be cautious when issuing or handling an account payee cheque since even the smallest of mistakes can lead to it being dishonoured by the bank.