Order Cheque -Details you should know

CHEQUE RETURN-REASONS

Order Cheque-Normally, It is seen that some Cheque book issued by the bank is already having the order cheques. Because you will see a word written on the cheque “or order”. And this word defines a cheque as an order check which can be converted into other types of cheques by striking out the word ” or Order“.

But you will see a word written on the cheque ” or bearer” in other Cheque books. In this case, you can make these cheques as an order by striking out the word “bearer” and by writing the word “order” at the place of the bearer.

What is the Order cheque?

In the case of an order cheques, the words ‘or bearer’ is cut by a pen. Such cheques can only be issued to the person whose name is mentioned on the cheque, and the bank will do its background check to authenticate the cheque bearer’s identity before releasing the payment. Further, the payee can pass this cheque to another party by signing on the back of the cheque, who can take payment on the payee’s behalf.

Images of an Order cheque

icici order cheque
an order cheque

How can you identify an Order check?

You can identify a cheque as an order cheque when you see the words ‘or order’ printed on a cheque or the word ‘or bearer‘ is strikethrough a pen. Striking out the word ‘bearer’ ultimately makes the cheque an order one.

An order cheque

What are the features of an Order cheque?

These are the feature of the order cheques-

  1. It is a negotiable instrument.
  2. May or may not mention the word “or order”
  3. It can be encashed by the named person only or authorized.
  4. Can be passed on to another person by endorsement.
  5. It is also risky if not made it a/c payee or crossed cheque.
  6. Generally, Identification is required in an order cheque for payment can be insisted.
  7. It can be deposited into the named bank account or can be cashed by the named person.

What are the remember point while issuing an Order cheque?

  1. The transfer of the cheque takes place through endorsement. If the payee endorses an order cheque in favor of another person, the endorsee must also sign the cheque to get the payment. In this way, the bank is discharged from liability.
  2. In these cheques, there is a condition that the funds are released only when the person whose name is stated on it presents the cheque to the bank. Also,
  3. To verify the identity of the holder of the cheque, the bank performs a background check at the time of its presentation. The payment of these cheques is made across the bank account.
  4. The paying cashier of the bank releases the funds and pays the same only when he is certain about the rightfulness of the ownership of the payee. Otherwise, the paying cashier would be held responsible for the same.

How do you fill an Order cheque?

These are the steps to fill an order 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 should be an order cheque if the word ‘ or bearer’ is written then it should be strikeout as this “ or bearer“

What is the difference between an Order cheque and a bearer cheque?

pointsOrder chequeBearer cheque
MeaningAn order cheque is a cheque payable when the only person named on the cheque presents it at the counter of the bank.Bearer Cheque is the one payable to the bearer, i.e. holder who carries and presents the cheque at the bank counter gets the payment.
Identification wordAt the end of the name of the payee, you will find the word ‘order’ on it.At the end of the name of the payee, you will find the word ‘bearer’ on it.
EncashmentOnly payee or as per his order the cheque can be encashed.Any person can encash the cheque by any person holding or carrying the cheque.
Transferred throughProper endorsementSimple delivery
ReceiptThe signature of the payee of the cheque acts as an endorsement only.The recipient’s signature acts as a receipt itself.
Banker’s Responsibility for payment of funds to the wrong personBanker or drawee will be held responsible.No responsibility of the banker or drawee.
ConversionThe drawer cannot convert an order cheque into a bearer one.The drawer can convert a bearer cheque into an order one.

Should I give the Order 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 check ” 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 Order cheques?

These are the persons who can get the amount mentioned over the order 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 the named recipient can also encash by visiting the branch after showing IDs if demanded.
  3. Any third person holding an order cheque can encash the cheque by visiting the branch after showing IDs if demanded. And make sure the third person should be verified by the drawer and drawee.

Is the Order check an open cheque?

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

How long is an Order cheque valid?

Normally, a cheque will be valid for up to three months from the date mentioned in the order check. Hence after three months from the date on the cheque, it will be invalid and can not be cleared or encashed.

How can I cash my Order cheque?

If it is an order cheque

  1. You need to visit any branch (in the city) of the bank that the cheque belongs to
  2. then Present it for clearance
  3. The bank clearance system, will verify the details on the cheque and clear it
  4. The cheque will be cleared and the person whose name is mentioned over the cheque or any third person by authorization will get the cash.

Faqs on Order check

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

Can the Order 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.

Is an order cheque can be endorsed?

Yes, It can be endorsed by authorization.

Is the Order cheque a negotiable instrument?

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

Is a signature required on the back of an order cheque?

it’s not mandatory to sign behind the cheque.
if a person as a third party is representing this cheque in a bank he has to sign behind the cheque for the record purpose.

When a cheque is an Order cheque?

A cheque will be an order cheque when the word ” or order” is mentioned over the cheque. And also striking out the word ‘bearer’ ultimately makes the cheque an order one.

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