How to Cash a Cheque

On receiving a cheque leaf, you’ll need to encash it. You can cash your cheque through your personal bank account in several ways. The common ways through which you can encash your cheque include visiting your bank’s branch or via an ATM (Automated Teller Machine). When you receive a payment from someone via cheque, you will not be able to spend the money immediately. In order to get access to your cheque amount, you need to encash it first.

What’s the Difference Between Depositing and Cashing a Cheque?

  • Cashing a cheque means you’ll get access to the entire cheque amount in the form of cash instantly. You can also spend that amount immediately.
  • Depositing a cheque means you’re crediting the amount mentioned on the cheque to your concerned bank account (personal account/company’s account/any other account). You’ll need to wait for a few days to get access to this amount for either spending it or for withdrawal.

Can You Cash Post-Dated Cheques?

When you receive a post-dated cheque, you can still encash it irrespective of the date. However, the person who has issued your cheque could have written an upcoming date for not having sufficient funds in his or her account. Hence, when you receive a post-dated cheque it is always better you check on the reason as to why the concerned cheque issuer has written a future date.

What to Opt for Between Encashing a Cheque and Depositing a Cheque?

Consider cashing a cheque only when you’re in need of funds for immediate expenses. This is because when you deposit your cheque into your bank account, not only is your money safe but you’ll also not get tempted to use up more money than what is actually required.

With respect to convenience too, depositing a cheque is easy versus encashing it. You’ll have several cheque depositing options to choose from.

Things to Keep In Mind Before Cashing a Cheque

Is Your Cheque Cashable?

When you receive a cheque payment from someone, it is always better to get their details such as full name, residential address, and phone number. Also, you can contact the cheque issuer’s bank and request them to confirm if the relevant account has sufficient funds to cover the cheque amount.

Check and confirm if the cheque leaf received by you is legit. If you end up cashing a cheque that is not a valid one, there are chances of you getting into legal trouble or paying a fee as a penalty to the bank. Even when you have the slightest doubt, make sure you contact the bank that has issued the cheque leaf and cross check about the funds in the concerned account before you try to encash it.

Is the Cheque Addressed to You With Proper Details?

Ensure the cheque issuer has mentioned your full name correctly. This is because banks may deny encashing your cheque when they find discrepancies in the name mentioned by the cheque issuer versus your actual full name. In case the cheque was issued to one person or more, it is mandatory that all the payees must include their signatures on the cheque. Here payees include either a person or persons who are being paid.

Are the Details on the Cheque Correct?

  • All of the details mentioned on the cheque you’ve received have to be valid and complete. Here details refer to cheque date, cheque amount, and signature. If any of these details are either missing or invalid, the bank may refuse to encash your cheque.
  • Keep a tab on the date on which it was issued. Mostly, banks deny to encash a cheque post six months after it was issued.
  • Verify and see if the cheque amount written in numbers and words are identical. This is because most banks do not honour your cheque when the numerical and written amounts do not match.
  • For a cheque to be legitimate, it’s important that the signature on it is valid. It should have the signature of the bank account’s owner. Here, the bank account is where you’ll withdraw your funds from. For any discrepancy in the signature, the bank can refuse to encash your cheque.

Do Not Miss on Endorsing Your Cheque

  • On the back side of your cheque, there is something called as “Endorse here”. You need to sign on that line before you actually encash your cheque.
  • If the cheque has been issued to more than one payee, all the concerned payees should mandatorily endorse the cheque.
  • It is possible to deposit a cheque leaf into a joint account even when only either of the joint account holders signs the cheque.
  • After a cheque has been endorsed, the cheque will become a “bearer” instrument and can be encashed by anyone unless and until your cheque has specific instructions written on it.

What Documents You Need to Cash a Cheque

  • When you cash a cheque via an ATM, a valid photo ID might not be required.
  • When you want to encash your cheque in person, you’ll need to submit a valid photo identity proof. You can submit your passport or driver’s license as the identity proof.

What Happens When the Payee Section Has Your Name as Well as Someone Else’s Name

  • In case “and” is used between the names, you can deposit only to a joint all or joint-alternate account that belongs to you as well as the other person’s name mentioned on the cheque.
  • If “or” is written, your cheque deposit can be processed into the following accounts:
    • Your personal bank account or
    • The other person’s bank account

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