OUR BOOKS

16 personal finance principles every investor should know how to be your own financial planner in 10 steps 11 principles to achieve financial freedom

6 dumb mistakes which you make while writing Cheque’s – Dont do it !

by Manish Chauhan · 62 comments

One of the most common ways to pay money to someone is through cheque’s. Cheque’s give you the flexibility to make payments to someone at some later date (post dated cheque) by writing it now at this moment. Writing a cheque seems to be such a simple task, but do you know that there are many weak links in writing cheques which can create a big problem for you.

If you are not careful while writing a cheque, it can be misused by someone else and potential of monitory loss to you along with unwanted headache. Today’s generation is very causal when it comes to writing  the cheques. In this article, I will cover 6 must know points which you should always practice writing the cheque’s . You can see these 6 points as a step by step recipe to write cheques. Lets see them one by one

1. Do not leave spaces between words or numbers

Its a no-brainier. When you write numbers and words in the cheque, be it Name or amount, never leave a space or gaps between them, because that gives a chance to add some alphabet or number and change the whole cheque.

Imagine you issue a cheque to “ANKIT SHARMA” , but put sufficient space between “ANKIT” and “SHARMA” and it looks like “ANKIT    SHARMA” . One can add an additional “A” after “ANKIT” and the name can become “ANKITA SHARMA” . However if you just leave exact one small space between “ANKIT” and “SHARMA” , its going to be tough to add another alphabet in between.

Dont leave space or gap while writing cheque

2. Make sure you cross the cheque saying “A/C Payee” 

If you are going to pay to some person and want to force that the payment should go to the same person bank account, in that case, you should be putting a double cross line on the left-top corner of cheque and write “A/C Payee” or “Account Payee“, which ensures that the money will get credited only to a bank account and not be handed over to someone as CASH over the counter.

Add AC/Payee on top left corner while writing cheque

A lot of people forget to do this, and if the cheque is misplaced or lost, someone can pose himself as the target person and take the money from bank, I hope you know how easy it is to steal someone’s identity and misuse the documents.

3. Add a line after the name and amount till the end 

I recently learned this point, where you add a running line like —————————- after the name and the amount in the cheque, which ensures that one cant add anything after the name and amount and misuse it .

add running line after name amount in cheque

4. Cancel the word “Bearer”

If you look at your cheque closely, in the “Pay” section, there is space for the name and then on the right corner it ends with “Or Bearer” , which means that either the person whose name is written in the cheque or anyone else who is bearing the cheque can encash it , provided the “A/C Payee” is added to cheque as mentioned in 2nd point above. So you should always cancel the word “Bearer” from the cheque, unless you really want it. This ensures additional safety of the cheque.

5. Add a sign of “/-” after the amount”

Now this might sound so small, but this has lots of wisdom inside this simple trick . There is huge difference between Rs 37,000 and Rs 37,000/- . In first option of Rs 37,000 , you can add more numbers at the end and can make it Rs 37,00000 if there is enough space ahead of it, but in case of Rs 37,000/- , You cant do anything . Below is a simple example of how it can be misused.

Corrent way of writing amounts on cheque

6. Keep the details of Cheque’s issued, even if it sounds boring !

And finally, when you give a cheque to someone, write down the cheque number, account name, amount and the date when it was issued or dated, because you might need this information incase you want to cancel the cheque. A lot of times, it happens that you need to cancel the payment, but do not remember the details. Having recorded this information would be handy at times and will help you to act faster.

ICICI Bank also has a small tutorial on correct way of writing cheque’s, which I have added below, just have a look at it and you should understand most of the things.

Some more tips (From Readers Inputs in Comments section)

  • Rishi Bhatia says – “Generally, while giving a cheque, i also make a point to use a cello tape on the name and amount, so that no one can change these”
  • Jitendra says – “In the present era of mobile phones, when most of us have camera enabled cell phone, it is better idea to get a snapshot of Cheque before handing over. This way all your details will be maintained.”

Use these 6 things everytime you issue a cheque

Next time you write a cheque, just make sure you have done all these 6 things, and the chances of misuse of your cheque will be close to ZERO because each and every step add a security layer. Let me know if you have any tips on writing cheque  in correct manner or any real life experience on this issue.

 

Want FREE HELP in buying right health insurance policy for you ? Get Free Help Now


Subscribe via RSS or Email:
What do you want to read about
Mutual Funds Life Insurance BankingHealth Insurance Credit Report and ScoreMost Commented ArticleReal Life Experiences Share MarketLoans Real Estate Income TaxCredit Cards For Begineer Investors Succession Laws EPF ULIP Product ReviewsBest of Jagoinvestor Other Products & Concepts How-TO GuidesBooks, Launches, Initiatives Investors Myths Psychology & Wisdom PPF General  
Buy Jagoinvestor Books in Ebook Format

{ 62 comments… read them below or add one }

1 Kishore October 7, 2013 at 10:58 am

Nice tips. Thank you very much.

Reply

2 Ambrish Bhargava October 7, 2013 at 11:06 am

Add an image of cheque which covers all the points mentioned above and high light each and every point it.

Reply

3 Manish Chauhan October 19, 2013 at 8:51 am

Nice tip !

Reply

4 Rishi Bhatia October 7, 2013 at 11:20 am

Generally, while giving a cheque, i also make a point to use a cello tape on the name and amount, so that no one can change these.

Reply

5 Manish Chauhan October 19, 2013 at 8:49 am

Good tip !

Reply

6 Jagdish October 7, 2013 at 11:35 am

really very important information provided. I have signed many cheques but never thought of point no 3 ever. Thanks

Reply

7 Manish Chauhan October 19, 2013 at 8:49 am

Now start implementing that

Reply

8 Jitendra October 7, 2013 at 11:38 am

In the present era of mobile phones, when most of us have camera enabled cell phone, it is better idea to get a snapshot of Cheque before handing over. This way all your details will be maintained.

Reply

9 Manish Chauhan October 19, 2013 at 8:49 am

Good tip !

Reply

10 Satish Ramankutty October 7, 2013 at 11:58 am

Awesome Article…. These are some common mistakes that we do. Just two days back i signed a cheque for 70000/- without the AC Payee and realised it later and had to open the envelop again and make necessary corrections and then send it :(

Reply

11 Manish Chauhan October 19, 2013 at 8:46 am

Thanks for mentioning how important you felt is was :)

Reply

12 vikram jadhav October 7, 2013 at 11:59 am

I haven’t used /- in rupees word (e.g I wrote “Seven Thousand Only” not “Seven Thousand Only /-“)
But in Rupees Number i always used 7000/-
Is this ok?

Until now i haven’t used running lines and word “A/C Payee” but crossed two lines.
Now onwards i will follow your way, thanks manish.

Reply

13 Manish Chauhan October 19, 2013 at 8:45 am

I think even this much is pretty good enough for security

Reply

14 Sudheer M October 7, 2013 at 12:03 pm

Good info Manish,

I would like to add that always fill the cheque yourself, with your pen only. There is no rule which says that if the ink is different, cheque will not be honoured etc., which are absolutely baseless.

There has been instances where in an insurance agent for a car insurance has told prospective buyer of an insurance for a new car, to use his pen for writing the cheque (he has written the insurance company name in the cheque) citing that different pens may cause a dishonour of the cheque. The buyer used the pen and later on found that a big amount has been withdrawn, as it was a pen where in the ink can be erased.

So, it is better to use once own pen and also to write the cheque ourselves rather than just signing on the cheque written by some one.

Reply

15 Manish Chauhan October 19, 2013 at 8:44 am

Thanks for sharing that incident .

Reply

16 Sudheer M October 7, 2013 at 12:04 pm

One more point.

It is always better to write on the cheque, “Amount less than Rs.XXXX” in case you are giving the cheque to an unknown third party, which can reduce the fraud chances.

Reply

17 Manish Chauhan October 19, 2013 at 8:43 am

Thanks for sharing that Tip , Didnt knew that we can do this

Reply

18 Vijay October 7, 2013 at 12:34 pm

Some banks (particularly in the US) provide some space to write down the purpose of the check (like house rent, some traffic violation,….). This was really beneficial since we tend to at times forget about the check and try to unsuccessfully recall only after looking at the account statement!

Entering this information on the back of the check is an option, but it’s not quite as useful. We either try to keep a scanned copy of check or a snapshot using ever-rising megapixel numbers of the smartphone and save the file with a name that identifies its purpose as well.

Reply

19 Manish Chauhan October 19, 2013 at 8:43 am

thats a very good point, I think we can anyways write the purpose at the back of the cheque !

Reply

20 Pratik October 7, 2013 at 12:47 pm

Hi Manish,
As usual simple but very useful info.
One point I can add is that when we hand the cheques to our insurance agents for paying the premium of policies, we should write the policy name and policy number at the back of the cheque. This will make sure that agents dont use that cheques to sell us some fresh/new policies. Such practices have happened in the past.
So i think mentioning policy details at the back of the cheque will be helpful. However writing too much details at the back of cheque can cause hindrance in clearnace of cheque.

Reply

21 Manish Chauhan October 19, 2013 at 8:42 am

Thats a good tip !

Reply

22 Zankhana S Tikhe October 7, 2013 at 3:10 pm

good info :-)

Reply

23 bharat shah October 7, 2013 at 3:53 pm

good compilation of important information for safety. thank you.

Reply

24 Manish Chauhan October 18, 2013 at 11:28 pm

Thanks

Reply

25 Sreedhar October 7, 2013 at 6:44 pm

Excellent information Manish. These points really educated me, definitely next time i will be more confident when i am writing cheques.

thank you once again for such a wonderful information.

Reply

26 Manish Chauhan October 18, 2013 at 11:24 pm

Welcome !

Reply

27 Sushil October 7, 2013 at 9:33 pm

Manish..here i want to share one incident…………IT department issued me a cheque of Tax Refund. I went to bank to deposit the cheque and person at the counter insisted me to drop the cheque in dropbox but i insisted to give me a recipt which he did not agreed. I dropped the cheque in dropbox and as per my expectation , cheque was lost by bank . Later on inquiry i was told that no such type of cheque was deposited and i m telling a lie……So what is the option for me when i have no proof….

Reply

28 विवेक रस्तोगी October 8, 2013 at 2:45 pm

Bank can not force you to drop cheque in dropbox. you can approach to branch manager and ask him to sign and bank seal on counter folio. Bank Manager can’t deny, and if he is denying ask him to give me in writing that customers have to drop cheque in dropbox and branch manager / staff will not sign on it. After that you can approach banking ombudsman.

Reply

29 Sudheer M October 11, 2013 at 12:09 pm

Yes, RBI has clearly stipulated in the circular that bank has to give an acknowledgement to the customer in the link given below.
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=3217&Mode=0

Reply

30 Manish Chauhan October 18, 2013 at 11:19 pm

The best thing is to file a RTI , They cant deny in the RTI about it !

Reply

31 Nirmal October 8, 2013 at 4:48 am

The A/C Pay can be written somewhere in the middle of the cheque. If you write it at the corner then there is a possibility that portion of cheque can be torn.

Reply

32 Manish Chauhan October 18, 2013 at 11:18 pm

Thanks for that Tip

Reply

33 Chetan October 8, 2013 at 6:52 am

Good information Manish !!

Reply

34 Joel Trinidade October 8, 2013 at 10:54 am

Statement : provided the “A/C Payee” is added to cheque as mentioned in 2nd point above.

Correction: provided the “A/C Payee” is NOT added to cheque as mentioned in 2nd point above.

Reply

35 Manish Chauhan October 18, 2013 at 11:16 pm

Will change that !

Reply

36 Joel Trinidade October 8, 2013 at 11:01 am

Dear Manish,
I agree with you on the statement “Today’s generation is very causal when it comes to writing the cheques.”

But still would like to ask what makes you say this ?

Regards
Joel

Reply

37 Manish Chauhan October 18, 2013 at 11:15 pm

I have seen cases like that :)

Reply

38 Avinash October 8, 2013 at 1:08 pm

Putting a cello tape on the name and amount on cheque seems better idea since paper gives 100% fibre tearing if removed with cello tape and one can’t tamper it by any means… just wanted to understand whether banks accepts such kind of cheques with a cello tapes on it ???

Reply

39 Manish Chauhan October 18, 2013 at 11:14 pm

I think they will take it, only that the cheque should be processable through machines !

Reply

40 Mahesh A October 8, 2013 at 1:39 pm

Dear Manish,

Here is one more foolproof way of writing a cheque & ensuring that it goes to the right a/c & person. Write the name of the Bank, complete A/c no & name on the Pay line: for e.g. PAY Bank of Baroda SB A/c 000123456789123 Manish Chauhan. Most of the time, this is sufficient.

More Tips:
1. You can also cross the cheque A/c Payee & Not Negotiable.
2. If the cheque is for large amounts, you can also write “Not over Rs.______.”
E.g. if the cheque amount is, say, 100,000/- , you may write “Not over Rs.100,000/-” This is generally done in commercial transactions. But there is no reason why individuals cannot do the same.
3. Use a reverse carbon. That is, beneath the cheque leaf, place a carbon sheet, reverse side up, before writing the cheque. Whatever you write, shows up as a mirror image on the reverse of the cheque. Helps to identify any tampering.

Hope this helps

Best Regards

Reply

41 Manish Chauhan October 18, 2013 at 11:14 pm

Thanks for those tips !

Reply

42 ASHOK October 9, 2013 at 6:18 am

One more Eye opening doc..

Reply

43 Manish Chauhan October 18, 2013 at 11:07 pm

Thanks

Reply

44 Aniket October 11, 2013 at 10:49 am

Valid points, but it is surprising how many of us do not follow these. I guess writing cheques are taken for granted and often ignored. Also to record the cheque details, the cheque book often has the counterfoil or slips at the end of the cheque books, filling that will be sufficient record of the cheques.

Slightly off topic, the other practice is to sign twice, it only makes sure that the cheque is not dishonored due to mistake in signature… have seen it often on cheques.

Reply

45 Manish Chauhan October 18, 2013 at 10:17 pm

Thats a good point , I never heard someone telling me to sign 2 times ! :)

Reply

46 Ravi October 11, 2013 at 2:10 pm

I also always write the amount as one word “Tenthousandandfivehundredonly “

Reply

47 Manish Chauhan October 18, 2013 at 10:12 pm

Thanks for sharing that !

Reply

48 Puru October 12, 2013 at 2:48 pm

Very good information. I was not following some of these like canceling the bearer. Will keep in mind now

Reply

49 Manish Chauhan October 18, 2013 at 10:00 pm

Welcome . Spread the knowledge !

Reply

50 Sanjay October 15, 2013 at 2:51 pm

Very informative. Thanks

Reply

51 p.b. lakshman October 16, 2013 at 3:57 pm

Good Information. As an accountant I have caught one of my staff misusing a cheque by inserting additional alphabet because of more space
in between the name …………lakshman

Reply

52 Manish Chauhan October 18, 2013 at 8:57 pm

Thanks for sharing this ! . Its like a real life confirmation on this topic

Reply

53 p.b. lakshman October 16, 2013 at 4:00 pm

very useful information

Reply

54 Manish Chauhan October 18, 2013 at 8:57 pm

thanks

Reply

55 Rajesh Skin October 18, 2013 at 7:32 pm

This was an amazing tips for all the new check users , i was also one of the victim who lost 5o thousand when i have written as 5 thousand but finally i got my money back after lot of follow up and lot of time was . so pleas follow it .

Reply

56 Manish Chauhan October 18, 2013 at 8:35 pm

What happened in your case ? Any details ?

Reply

57 Satish October 19, 2013 at 9:48 pm

I always write my cell no below my signatures but above the white strip. In case you lose the cheque, some samaritan can contact you and also the bank can contact you on your present number in case there is any problem in passing the cheque,say difference in signatures or any other mistake.

Reply

58 Manish Chauhan October 26, 2013 at 2:06 pm

Nice tip I would say ~

Reply

59 vikash October 28, 2013 at 3:16 pm

Dear manish awesome post…one more thing I want to clarify. …like if I have crossed the cheque and written “AC Payee” on the corner and leave the “or bearer” side on the other side…will there be any issue like can the bearer also deposit the money in his account

Reply

60 Manish Chauhan November 4, 2013 at 11:31 am

There wont be any issue if you have put “ac payee”

Reply

61 Aashish Pathak November 14, 2013 at 12:40 pm

I always put up an extra signature on the back side of the cheque drawn. Is it ok to pust such a signature on backside of the cheque ?

This article is indeed very good and informative.

Thanks.

Reply

62 Manish Chauhan November 14, 2013 at 2:06 pm

Yea its perfectly fine and a good practice !

Reply

Leave a Comment