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Check list to write the cheque

5-Steps Checklist while writing your Cheque!

by Holistic 2 Comments | Filed Under: Investments

Listen to this article


Writing a cheque seems to be the easiest thing to do right? For many people, it’s a routine task to do.

But many times people end up writing cheque loosely, which leads to major fraud and cheating. Many such events are being recorded by the banks on a routine basis!

This article will help you to keep the necessary precautions and you will avoid making all the major mistakes while writing a cheque.

Table of Contents

    I. Let’s understand the Anatomy of a Cheque.
    II. The 5-Steps Checklist while writing your Cheque.

      1. Writing the name properly in a cheque.
      2. Filling the monetary amount properly.
      3. Correct way to sign the cheque.
      4. Filling the date in the right way.
      5. No overwriting, scribbling or erasing/cutting anything to rewrite.

    III. General Safety measures to be taken in your Cheque.
    IV. Frequently asked questions on Cheques.

Let’s understand the Anatomy of a Cheque

Have you wondered HOW the cheques actually get processed? What all information does a cheque consists of, to make it process faster?

Apart from the obvious information such as the name of the person you would like to make a payment, the amount of money in words and in numbers, and the date you wish to issue the cheque. Below is the information a typical cheque usually consists of:

  • MICR Code: It is a 9 digit Magnetic Ink Character Recognition Code, it consists of unique characters printed on the cheque and enables faster processing.
  • IFSC Code: It is an 11 digit alphanumeric code, used for the online transaction.
  • Cheque number: It is a 6-digit number useful in identifying a cheque.
  • Account number: It consists of the account number of the issuer of cheque.

A dummy cheque shown below gives the description of everything you see on a cheque.

Anatomy of a cheque

The 5-Steps checklist while writing your Cheque

1. Writing the name properly in a Cheque

Below are the guidelines to write a name in the cheque in a proper way:

  • If the cheque is written for an individual it is essential to include their full name with correct spelling and without long spaces. Long spaces may lead to major frauds.For example, Let’s say you are issuing a cheque to “HARI M.” , but by putting a long space between “HARI” and “M.”, the name becomes: “HARI M” . One can add an additional “S” or “SH” after “HARI” and the name will become “HARIS M.”, or “HARISH M.” respectively and cheque can easily be misused.Therefore, it’s a good practice to leave a smallest space between the names, so that, it become impossible to add any further alphabets.

Wrong way-1Wrong way-1
Wrong way-2

  • If the beneficiary is a company, then you must get the correct information regarding its name to which the cheque is to be issued, it may not be similar to its displayed name!!
    Also, it is advisable to mention their full name and not using its acronym, unless clearly given instruction from the beneficiary.
  • After writing a name add a RUNNING LINE, as a security to prevent any type of malpractice or exploitation with the cheque.

Running lines

  • You must ensure that the cheque you are writing to somebody, should go to the same person’s Bank Account. You can do this by putting a double cross line on the top left corner and mentioning “A/C Payee”, and not by simply putting a double-cross line, without mentioning “A/C Payee”, as discussed in detail in the next section.

The correct way to cross the Cheque: Account Payee Cheque vs. simply Crossed Cheque

Crossed Cheque:

Crossed chequeA simply crossed cheque, as shown above, can be encashed by the payee only by depositing it in his/her bank account. BUT, the problem with a crossed cheque is given below:

  • a payee is free to make further endorsements.
    • → For example, if the cheque is written in the name of Mr. A. He can endorse it to Mr. B, by writing and signing at the back of the cheque leaf. And, Mr. B can further endorse it to Mr. C, by writing and signing at the back of the cheque leaf.
  • If the cheque is dishonored in the above example, then Mr. C can sue Mr. B and Mr. B can sue Mr. A. And, Mr. A can further sue the drawer of the cheque. So, it is very risky.

Therefore, merely by crossing the cheque, payment is not made to PAYEE ONLY! The payee can further endorse or cash it according to his wish.

Account payee cheques:

Account payIn the Cheque shown above, “A/C Payee” is written between 2 crossed lines. It ensures that the cheque will be encashed by depositing to payee account. This way, the cheque cannot be endorsed to anybody by a payee. And, it is the right way to cross the cheque.

The practice of writing “A/C Payee” cheques significantly protects the misuse of the cheque. And, it provides an added layer of security in the cheque transaction.

In case the cheque is not a crossing cheque, cancel Bearer.

An ideally written cheque is shown below:
Ac payee only crossing cheque

2. Filling the monetary amount properly

There are 4 points to keep in mind while filling up the amount details in a cheque:

  • After writing amount in words, always write the word ‘ONLY’.
  • In case there are paisa to be paid along with rupees, put a ‘slash’ as a separation.
  • Do not leave any space while writing the amounts in words as well as in numbers.

Space

  • After writing the amount in numbers, put a slash with a hyphen (/-), and do not forget to strike out the empty space, as shown in the image below:

Amount

3.The correct way to sign the Cheque

Signature plays a crucial role in Cheque transactions. Though nowadays Cheques come with our printed details such as name, address and so on.

Signatures are still counted useful to verify the identity of an issuer.

Keep your signature clear and place it properly in a blank space as above “Authorized Signatory” as shown:

Signature

4. Filling the Date in the right way

There are 3 points to consider while writing a date in your cheque:

  • A cheque without a date will not be processed by the bank and it will get bounced.
  • A wrongly written date such as a wrong month or year and especially if the date is past 3 months, may lead the cheque to get Dishonored.
  • If you do not have sufficient balance in your account while your cheque is under the process of getting cleared, it will get bounced.

Keeping the above factors in mind, the date is supposed to be mentioned in your cheque.

5. No overwriting, scribbling or erasing/cutting anything to rewrite

If any kind of overwriting, scribbling or cutting happens in a cheque due to any reason. It is always a good practice to cancel the existing cheque and write a fresh cheque carefully.

General safety measures to be taken in your Cheque

  • Important printed information such as MICR code & band, A/C number, IFSC code, and cheque number must be without any distortion.
  • Never submit or drop a cheque without ensuring the correct details of Date, Payee name, Amount of Cheque in words and Numbers with precaution.
  • It is a good practice to stick a transparent strip of cello tape on the name and amount written on the cheque, in order to keep them safe for any illegal changes.
  • Keep the record of all the cheques used for payment purpose by noting down Cheque numbers or keeping a snapshot of a cheque before submitting it.
  • In case, payments to be made towards bills for utilities, give the information such as Credit Card number, Mobile number, connection number at the reverse side of the cheque.
  • Destroy all overwritten, folded or disfigured cheques.

Common questions on Cheques

1. How long does it takes for a cheque to get cleared?

In India, it normally takes 2-3 working days. But clearance time may exceed in few cases.
Nowadays we have Cheque Truncation System (CTS), it makes the cheque clearance process digital and faster.

2. How to Stop Payment on a Cheque?

You should write a letter to the bank clearly mentioning all necessary details regarding your cheque, so that your cheque can be spotted and clearing process may stop.

3. How to prevent the risk of cheque forgery?

Keep all the safety measures described in this post, such as writing the name and amount (in words and in digits) properly. Give smallest possible spaces while writing name and amount in words.
And, always write the word ‘only’ after mentioning the amount in words.

4. When can a bank dishonor or not process your cheque?

  • If there is insufficient balance in your account, while your cheque is getting cleared!
  • If the date mentioned in your cheque is more than 3 months old, it will be treated as an outdated cheque.
  • If your signature doesn’t match.
  • If your cheque is overwritten and information provided by you is unclear and cluttered.
  • If the details in your cheque are not filled properly!

5. Can I write a cheque in 2 different handwritings or 2 different inks?


As long as information provided by you is clearly defined and your signature is accurate, there won’t be any problem related to different inks or handwritings.

6. While writing the amount in words, can I write ‘Nine Zero Zero Zero’ instead of Nine Thousand?

No.

7. If I’m writing a cheque to any firm, is it mandatory to write M/S along with the name of the firm?

Not required.

Conclusion

Hope you have found better clarity in writing the cheques effectively. After taking above safety measures your cheque will work well.

If you have any comments or questions, write them in the comment box below.

Or are you interested in creating a Comprehensive Financial Plan for your financial goals?

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Comments

  1. K Satyamurti says

    January 19, 2021 at 10:55 am

    I write the date of the cheque in black ink whereas all other contents including the signature were in blue ink.
    Will there be any objection by the bank?

    Reply
    • Holistic says

      October 20, 2021 at 2:22 pm

      Hi,

      As long as the information provided by you is clearly defined and your signature is accurate, there won’t be any problem related to different inks or handwritings.

      Reply

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24. September, 2021.
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Sridhar
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8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
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6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
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Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

Google Reviews

Jey S
Jey S
24. September, 2021.
I have been using Holistic Investment Planners for the last three years. Mr. Srinivasavaradhan answered all my questions and doubts very patiently during the first free consultation. I was able to clearly define my short-, medium- and long-term goals once I signed up for the comprehensive plan and got their investment plan suggestion to achieve my goals. They are very polite and highly professional whenever I contact them for any queries or make investments. They never pressurize you to invest on their recommended financial products. I would have been lost money by investing directly without their help since I do not have time and knowledge about different financial products. Risk planning is also done as part of financial planning. Truly, they are holistic planners when it comes to your financial planning. They help you to define your life goals, understand your financial resources and establish a plan to invest towards reaching those goals. They do review your plan as you progress to make sure that you are on correct path to achieve those goals. Kudos to the team and keep up the good work!!! I am happy that I found holistic investment planners for my financial planning and management.
aksaswadkar
aksaswadkar
24. September, 2021.
I was about to retire and really not understanding how to invest money to have financial freedom and fulfilling my goals. Was desperately searching on internet way out and fortunately came across Holistic Investment Planners. I read number of articles on their website and realized that this is the agency which I want and engaged their services for my retirement planning. It is an excellent experience to be associated with Holistic. Right from day one our interaction was fantastic and they gave me such a wonderful plan that I had never imagined. I am fortunate enough to be in the client list of Holistic. I have recommended Holistic to my friends as well.
Lionel Faber
Lionel Faber
16. September, 2021.
I've been availing their services for the past year. They are highly knowledgeable in the field and are very patient with all doubts and queries. Personalized financial planning is provided keeping your short term, medium term and long term goals in mind. They do not pressurize you to purchase schemes of their choice. They provide their input and suggestions and leave the decision up to you which shows their honesty and high principle.
Sridhar
Sridhar
8. September, 2021.
Financial planning brings peace in life. Holistic Investment have supported in arriving financial plan based on future goals. My investments are regular since then. They are professionals in their business, will recommend others.
Nitesh Agrawal
Nitesh Agrawal
6. September, 2021.
I have been using Holistic Investment Planners from last one year. The journey has been fantastic. Being a finance person myself I always thought we can look after and plan own finances also. However, due to lack of time and deciplain the things are not always as desired. After joining with Holistic Investment for the first time Icame to know the Financial goals and quantified them. Some dreams were unrealistic based on the earnings and savings so had a reality check. Also got the information and deciplain of investing on regular and more rewarding securities. I definetly suggest to use Holistic Investment Planners. They are professionals, available and hear youor full story before presenting plans. They are flexile in the sense if there are some urgent deviations required, they help to plan the same. For all professionals/individuals I would suggest using professional help of Holistic Investment Planners for best results in long term investment and financial goals achivements. Last advise will be to start early in your life. It really pays well to start in the beginning itself else the dreams needs to adjust :)
Swetha Vasanth
Swetha Vasanth
6. September, 2021.
This is my first year service with the Holistic Team and I would say that they are very much helpful in creating a financial plan and follow ups during the year. I would definitely suggest them if anyone who is willing to proceed with their savings professionally.
Joseph Mathias
Joseph Mathias
6. September, 2021.
I came to know about Holistic Investment Planners online while searching for different investment ideas. Once I contacted them the journey was very smooth. Mr. Ramalingam explained all the aspects of Financial planning in detail and it opened my mind. I realized how important it is to have a Financial planning. Mr. Rajan suggested all the requirements as per my goals and made a Investment plan keeping in mind of my goals. I started my Investment journey with them. I wish I had done it some years back then it would have been in a different level. Review meetings were held every six month to check the implementation of the plan and check the results as per the requirements and to check if any changes required. Overall it was a good experience with Holistic Investment team and would like to continue in the years to come.
Srinvas Kannan
Srinvas Kannan
30. July, 2021.
I came across Holistic investment planners almost 5-6 years back, but I did not have the trust since I had met a few of them who did not sound promising. Then I started investing through a financial advisor of my friend. After 4 years of investing the returns were very low. I was disappointed and started looking for financial advisors when I came across Holistic investment. I had a detailed discussion about my goals and the way they would approach achieving my goal before deciding to switch my investments to them. After a thorough analysis of my then existing portfolios, they suggested new ones and we zeroed-in on 6 schemes/funds where our investment would be split. I am glad I made the decision of switching over and taking Holistic planner's advise, my returns are handsome and I only wish I could have taken their help/advise 5 years back itself. Neverthless, I would like to recommend their services for investment and financial advise if someone is serious about their investments.
Shivaram Andiappan Selvaraj
Shivaram Andiappan Selvaraj
3. July, 2021.
I got a free first time consultation. I got my doubts resolved. They also gave additional advises for investment planning which was also useful.
Nellai B
Nellai B
26. June, 2021.
I have been associated with them for the past three years. They are very professional and polite in answering all our questions. I have complete trust in their suggestions. I strongly recommend for anyone. I am looking forward to have strong and successful association with them.
Google rating score: 4.4 of 5,
based on 61 reviews

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