A cheque is a payment instrument in the form a paper that instructs payment of money from a bank. The word ‘cash’ will be written on the pay line (not crossed) and the word ‘Bearer’ will not be crossed either. When you open a current account with a bank, you will receive cheque books. Any current account holder can pay through cheques. Cheques are generally valid for 6 months, unless, otherwise mentioned by the bank.
How Does It Work?
Depositing a cheque is a simple procedure. Once you receive a cheque, you must deposit that to the bank. Your bank will send the cheques’ images to the payer’s bank in order get the confirmation. Then, the bank will collect the amount mentioned on the cheque from the payer’s bank account for crediting it into your account. One bank collecting money from another bank is known as cheque clearing. However, this process will usually take some time which differs from bank to bank.
In Singapore, cheque clearing occurs only from Monday to Friday. During weekends and public holidays, there won’t be any crediting or debiting of money towards cheques. The cheque deposit cut-off time for most banks in Singapore is 3:30 p.m. Some banks offer branch banking, where the cheques are accepted even during weekends. The Quick Cheque Deposit Boxes are another mode of depositing cheques, where you can drop your cheque on any day.
The table below explains the availability of funds for cheque deposits:
|Deposit day||Credited to account on||Funds available on|
|Monday to Thursday before the cut-off time||Same day||The next day after 2:00 p.m.|
|Thursday after the cut-off time||Friday||Monday after 2:00 p.m.|
|Friday before the cut-off time||Friday||Monday after 2:00 p.m.|
|Thursday after the cut-off time||Monday||Tuesday after 2:00 p.m.|
Why A Cash Cheque Is Issued?
In Singapore, cash cheques are used by many people on daily basis. Cash cheques are generally used for payment of small bill values, regular payments for goods & services, and also in case of unavailability of quick cash.
Is It Suggestable To Issue Cash Cheque?
Issuing a cash cheque is as good as cash, once gone you will lose the money. Hence, you must be very careful while issuing a cash cheque. Cash cheques must be deposited promptly in order to avoid the risk of loss or theft. As stated earlier, cheques are valid for 6 months.
Stolen/Lost Cash Cheque
Most of the banks in Singapore have introduced a Cheque Truncation System (CTS), which is an online image-based clearing system. This electronic system has eliminated the use of physical cheque after you deposit it at the bank. Hence, the risk of loss or theft of a cash cheque is reduced to some extent.
A cash cheque has all the threats of cash. There are 2 possibilities if you lose your cheque or if it is stolen:
- If the cheque has not been cleared, you can request the bank to stop the payment. The bank might charge a fee for such a request.
- All the cheque settlement transactions are traceable, you can take the help of the police to track your cheque payment.