An account payee cheque is also referred to as a crossed cheque. This kind of cheque has the following words ‘A/C Payee’ mentioned on the top-left side written between 2 parallel lines. Despite technological advancements in the financial vertical, cheques continue to remain a popular way of initiating transactions.
One of the main reasons for this is its simplicity and security. However, if you are new to banking, you may not be familiar with a payee cheque. To get a gist of the account payee cheque meaning and significance, read on.
This type of cheque differs from a regular one because it can only be deposited into the recipient’s account. This means that you cannot withdraw cash using the cheque. What’s more, you can deposit the cheque into the account of the specific recipient and not anyone else’s account.
This secured cheque contains three main elements:
One of the most essential features is the two parallel lines drawn on the left corner of the cheque. These lines provide a clear indication that you cannot cash it and the amount will be deposited into your account.
In fact, it is one of the added security measures that help prevent fraud or misuse of the cheque. When the drawee writes a cheque to the payee, the amount mentioned on the cheque will be debited from the former’s account to the payee’s account after the cheque is realised.
Creating an account payee cheque is simple. Just follow the steps mentioned below.
Make sure to enter the details accurately, as any mistake can delay the process.
You can deposit the cheque by following this process:
The cheque clearance process may take up to 3 working days, provided the details are mentioned accurately and the drawer has sufficient funds in his account.
This type of cheque is secured as the bank initiates payment only in the account of the payee. As a payee, you cannot entrust anyone else to receive funds and this feature actually works to boost safety. Another crucial factor is that these cheques are valid only for 3 months or 90 days.
Knowing the essential features of an account payee cheque is crucial to help you manage banking transactions hassle-free. Whether you need to clear your credit card bills or pay your loan EMIs, you can use this type of cheque.
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You can make a cheque as an account payee by drawing two parallel lines on the left top of a cheque.
You can encash the cheque by following the process mentioned below:
It is important to visit the bank wherein the account holder maintains their account and where the cheque has been issued.
No, it is not possible to cash a cheque which has an account payee or is a crossed cheque. This clearly implies that the amount can only be deposited in the account.
No, these cheques are highly secure and cannot be encashed by anyone. The amount will be deposited in the recipient’s bank account only.
A payee is the recipient who receives the amount for a particular transaction.
The validity of the cheque is 3 months or 90 days.
If the cheque belongs to the same bank as yours, it gets cleared within the same day. If the cheque is from a different bank, it takes up to 3 working days for clearance.
