usually But banks issue check books to savings account holders. Checks are issued by the bank to both current account holders and savings account holders. In this era of UPI and digital transactions, the importance of checks has not ended. That’s why people prefer to use checks in big transactions. Check is considered as a proof of transaction. You too may have given money to someone through check many times. Do you know that there are 9 types of bank cheques? Let us know where and when which check is used.
1. Bearer check
Bearer check is a check which can be cashed by the person whose name appears on the cheque. Bearer check is also called ‘payable to bearer’ cheque.
2. Order Check
An order check is a check that has the name of the payee followed by “or order.” This is also called a “payable to order” check.
3. Crossed check
In crossed cheque, the check issuer draws two parallel lines at the top of the corner of the cheque, whether by writing “a/c payee” or not. This ensures that no matter who presents the check at the issuing bank, the transaction will take place in the account of the person named in the cheque. The advantage of crossed check is that it reduces the risk of money being given to an unauthorized person.
4. Open Check
Open checks are sometimes called uncrossed cheques. Any check which is not crossed comes under open check category. This check can be presented at the drawer’s bank and is payable to the person presenting it.
5. Post-dated cheque
A check which is dated later than the date actually issued is called post-dated cheque. This check can be presented to the drawee bank at any time after it is issued, but funds are not transferred from the payee’s account until the date given on the cheque.
6. Stale Check
This check is one whose validity period has expired and can no longer be encashed. Initially, this period was six months from the date of issue. Now this period has been reduced to three months.
7. Traveler’s Check
It can be considered equivalent to a universally accepted currency. Travelers checks are available almost everywhere and come in a variety of denominations. It is a check issued by the bank to make payment from one place to another. Travelers checks have no expiry date and can be used even during your next trip. You also have the option to redeem it after you return from your trip.
8. Self Check
When a person usually issues a check to himself it is called a self-cheque. In this, the word “Self” is written in the name column. Self-cheque is drawn when the drawer wants to withdraw money in cash from the bank for his own use.
9. Bankers Cheque
Banker’s check is a check issued by a bank on behalf of the account holder to pay a sum specified by the order to another person in the same city.
