Crossed Cheque -Details you never know

CHEQUE RETURN-REASONS

Crossed Cheque-Normally, It is seen that some Cheque books issued by the bank are already having the bearer cheques or order cheques. Because you will see a word written on the cheque “or bearer”, “or order”. And these words define a cheque as a bearer cheque or an order cheque that can be used for payment to someone but is not safe. And these cheques can be marked as crossed cheques for safety purposes by striking out the word ” or bearer and or Order“.

In simple words, a cheque is a transferable instrument to send and receive money without any physical transfer of cash. Hence cheque writing should do safely.

What is the Crossed cheque?

Sometimes, You may see and observe cheques with two sloping parallel lines with the words ‘a/c payee’ or without any word written on the top left corner of the cheque. That is a crossed cheque. The lines ensure that irrespective of who presents the cheque, the payment will only be made to the individual whose name is written on the cheque, in other words, The crossed cheque instructs the bank to pay only in the account of the named person or the third person by endorsement. These cheques are relatively safe because they can be encashed only at the drawee’s bank.

What is the meaning of crossed cheque?

Crossed cheque means any cheque crossed with two parallel lines on the top left corner or anywhere on the cheque which indicates to the bank that this cheque should be cleared only in the bank account of the person whose name is mentioned on the cheque.

Images of a Crossed cheque

crossed cheque in types of cheques
Crossed cheque

How can you identify a Crossed cheque?

You can identify a cheque as a crossed cheque when you see two parallel lines on the top left corner or anywhere on the cheque as shown in the top left corner with two parallel lines in the below image. And the words ‘or order’ and or bearer printed on a cheque should be strikethrough a pen.

What are the features of a Crossed cheque?

These are the feature of the crossed cheques-

  1. It is a negotiable instrument.
  2. May or may not mention the word “or order”
  3. It can not be encashed by the named person or authorized.
  4. Can be passed on to another person by endorsement.
  5. it gives instructions to deposit the amount in the bank account of the named person only or in the account of an endorsed person. because a Payee can further transfer it to a third person by endorsing it.
  6. Generally, Identification is not required in a crossed cheque. Just need to deposit in the payee’s bank account by filing a deposit slip.

Why should you cross the cheque?

You should use the crossed cheque for giving payment to someone or your suppliers because it helps-

  1. To stop encashing the cheque by an unauthorized person.
  2. Gives instruction to clear the cheque in the account of the named person.
  3. Records of beneficiaries can be tracked due to payment by crossed cheque.
  4. And a third person will not be able to misuse it.

What is the remembered point while issuing a Crossed cheque?

  1. Should check always whether it is crossed with two parallel lines or not.
  2. Payee’s name should be mentioned on the cheque.
  3. It can be more secure by making it a/c payee.
  4. Or bearer word should be stricken off.

How do you fill a Crossed cheque?

These are the steps to fill a crossed cheque-

  1. Take a fresh cheque.
  2. Enter the Date on the right top corner
  3. Then enter the Recipient Name.
  4. Fill the amount in numbers.
  5. And write the amount in words.
  6. Sign the cheque.
  7. End make sure it is not a bearer cheque if the word ‘ or bearer’ is written then it should be strikeout as this “ or bearer“
  8. And Must be crossed with two parallel lines on the left top corner or anywhere on the cheque.

What are the types of crossing a cheque?

These are the types of crossing a cheque-

  1. General crossing- is discussed in this post.
  2. Account Payee crossing
  3. Special crossing
  4. Not negotiable crossing

What is the difference between a Crossed cheque and an Account Payee cheque?

pointsCrossed chequeAccount Payee cheque
MeaningA crossed cheque is a cheque payable only in the bank account of the person named on the cheque or endorsed third person.A/c Payee cheque is a cheque payable only in the bank account of the person named on the cheque.
Identification wordTwo parallel lines on the top left corner or anywhere on the cheque.A/c payee is written between the two parallel lines on the top left corner or anywhere on the cheque.
Transferred throughProper endorsementNo endorsement
ReceiptThe signature of the payee of the cheque acts as an endorsement only.Not required sign due to no endorsement.
ConversionIt can be converted into an A/c payee cheque.It can not be converted into a crossed cheque.

Should I give the Crossed check to my suppliers?

If you want to be secure from fraud or misuse of cheques then you should not provide a bearer check to your suppliers at any time. You should check always the word mentioned over the cheque ” or Bearer” and must strike out ” or Bearer“. You can provide an order cheque to your suppliers but should also make it an A/c Payee cheque or crossed cheque.

Who can withdraw the Crossed cheques?

These are the persons who can get the amount mentioned over the crossed cheques-

  1. The person whose name is mentioned over the cheque means the recipient can deposit into his account by depositing the cheque.
  2. And endorsed any third person holding a crossed cheque can deposit into his account. And make sure the third person should be verified by the drawer and drawee.

Is the Crossed check an open cheque?

A cheque is generally known as an Open cheque when it is not crossed whether it is made payable to the bearer or order.

How long is a Crossed cheque valid?

Normally, a cheque will be valid for up to three months from the date mentioned in the crossed cheque. Hence after three months from the date on the cheque, it will be invalid and can not be cleared in the account of the named person.

How can I cash my Crossed cheque?

The crossed cheque can not be encashed. It can be deposited into the account of the person whose name is mentioned over the cheque or any third person by authorization will be able to deposit it into his account.

Faqs on Crossed check

1. What are the types of other cheques?

There are seen many types of cheques which you need to understand. Here is the link for different types of cheques provided plz go through and read- the types of cheques

2. Can the Crossed cheque be deposited in an account?

Yes, the person whose name is mentioned over the cheque can deposit the cheque into his bank account. And this cheque can be endorsed to a third person if required by authorization only. It can be encashed.

3. Is a Crossed cheque can be endorsed?

Yes, It can be endorsed by authorization.

4. Is a crossed cheque safe?

Yes, It is safe compared to a bearer cheque. Because crossed cheques can be deposited into the account of the named person only. And it can not be encashed.

5. Who can cross the cheque?

The drawer of the cheque can cross the cheque as generally or especially to get secure of any fraud. further, a holder of the cheque can also make it crossed if required.

6. Can be withdrawn cash by a crossed cheque?

No, Cash can not be withdrawn because crossed cheque means, the named person can only deposit into his account.

7. Is the Crossed cheque a negotiable instrument?

Yes, It is a negotiable instrument and can be endorsed to another person by authorization of sign.

8. Is a signature required on the back of a Crossed cheque?

it’s not mandatory to sign behind the cheque.
if a person as a third party is representing this cheque in a bank then the sign should be authorized on the front of the cheque or back site.

9. When a cheque is a Crossed cheque?

A cheque will be a crossed cheque when the two parallel lines are drawn on the cheque. Two parallel lines on the top left corner or anywhere on the cheque will be treated as crossed cheques.

Tags: , , , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *