What are the Precautions to be taken to Fill a Cheque Correctly?

How to write a cheque in India? Writing a cheque is probably the easiest thing to do right? Well, maybe. But there some simple things we overlook while writing out a cheque to someone that can easily be misused. This post will discuss the ‘hows’ and’ whats’. You all may think that what’s a big deal in writing a cheque? We write it so many times to pay bills, make payments etc. But there are times when people make the most obvious and sometimes careless mistakes while writing a cheque that can easily result in frauds or cheques being misused or dishonored.

Let us observe a step by step procedure to fill a Cheque:

Complete the steps in any order you like. In this example, you’ll move from the top of a check to the bottom (which should help you avoid skipping any steps).

Current date: write this near the top right-hand corner. In most cases you’ll use today’s date. You can also postdate the Cheque, but that doesn’t always work the way you think it will.

Payee: on the line that says “Pay to the order of”, write the name of the person or organization you are paying. You may have to ask “Who do I make the check out to?” if you’re not sure what to write. Avoid writing checks payable to cash – it’s convenient but risky.

Amount (in numeric form): write the amount of your payment in the small box. You should start as far over to the left as possible. If your payment is for $9.45, the “9” should be right up against the left-hand border of the dollar box to prevent fraud.

Amount (in words): write out the amount using words to avoid fraud and confusion. This will be the official amount of your payment. If that amount is different from the numeric form that you entered in the previous step, the amount you wrote with words will legally be the amount of your cheque. Use ALL CAPITAL LETTERS, which are harder to alter.

Signature: sign the check legibly on the line in the bottom-right corner. Use the same name and signature on file at your bank. This is one of the most important steps – a check will not be valid without a signature.

Memo (or “For”) line: include a note, if you like – this is an optional step. This is a good place to add a reminder about why you wrote the check. This might also be the place to write information required to process your payment (and find your account if the check gets misplaced). For example, you could write your Social Security Number on this line when paying the IRS, or an account number for utility payments.

A clear view of a Cheque & What does they represent:

Some Precautions to be taken to fill a Cheque Correctly:

Cancel the words ‘OR BEARER’ and Add ‘A/C Payee’ to the Top Left corner of the cheque.
Do not leave any space before or in-between the Name of the Receiver. Do not leave blank space after the Name is written.
Always write ‘ONLY’ at the end of writing the Amount in Words in the ‘RUPEES’ column. Also put a /- in the ‘Rupees in Number” column. Do NOT leave Spaces Anywhere.
Do Not sign on the MICR Band.
Don’t Forget the Date.
Do not Overwrite.
Keep the records of your cheques.
Destroy all canceled cheque unless they are used for any specific purpose like for submitting for ECS etc.
Never Handover a cheque without entering all three: Date, Payee name, Amount of Cheque in words and Numbers.
Sign clearly and if needed sign twice (as seen in the image above), to make sure the cheque is not bounced for a mistake in the signature.
Write the Credit Card Number, Connection Number, Mobile Number etc on the reverse of the cheque in case of payments being made towards bills for utilities.
Do not staple, fold, disfigure, or stick the MICR Band.

Note:

After you write the check, make a record of the payment (ideally with a check register, whether electronic or on paper). This prevents you from spending the money twice – the funds will still show as available in your account. until after the check is deposited or cashed, and that could take a while. It’s also a good idea to make a note of the payment while it’s fresh in your mind.

Before writing a check, make sure that it’s really something you need to do. Writing a check is cumbersome, and it’s not the fastest way to pay. You might have other options that make your life easier and help you save money.

Sometimes, in order to secure a cheque, you may mark out two parallel lines with ‘Account Payee only’ written in the middle, on the top left corner of the cheque. This is called ‘Crossing out a Cheque’. This means your cheque will be paid into the account of the person being paid and not to the person holding the cheque for payment at the counter.

Follow this carefully to direct the amount transfer into the account of the right Payee. It is an important step to safeguard your money.

To cancel a cheque mark ‘CANCEL’ in bold across the face of the cheque and if possible, inform the bank officials or make a note of the cheque number and record it as canceled. You should also mutilate the MICR code of your canceled cheque or shred the whole cheque. You should additionally scratch out your signature on the cheque.

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