How does account payee cheque work?

An account payee cheque is a type of cheque which can be deposited in the account of the payee (the party to whom the final payment is supposed to be made and whose name is mentioned on the cheque). It cannot be endorsed to anyone else.

What does account payee only mean on a cheque?

The legislation means that a cheque which bears the ‘A/C Payee Only’ crossing can only be paid into an account in the name of the person who has received the cheque (i.e. the payee) exactly as it appears on the cheque.

What is the meaning of not negotiable on a cheque?

You may write the words ‘not negotiable’ between the two parallel lines on your cheque. This means that if the cheque is transferred to another person, the person who obtains the cheque has no greater rights to it than the person who gave it.

How can I cancel my payee cheque?

A cheque can be cancelled in a simple method by crossing it with two lines and by writing the word “CANCELLED” between those two lines in capital letters.

What does for deposit to payee only mean?

If you write “for deposit only” on the back of a check made out to you and then sign your name, the check can only be deposited in your account. This is called a “restrictive indorsement,” and it should prevent you or any other person from cashing the check.

Can I cash account payee cheque?

How To Deposit or Encash A/C Payee Cheque. If you receive an account payee cheque, remember you can’t cash it through the counter. You have to deposit it in your bank account with the cheque deposit slip.

Can I deposit account payee cheque in any bank?

Bearer cheque is a direction to the bank to pay a certain amount to the holder of the cheque. Therefore, anyone can encash the Bearer Cheque over the counter. But, as aforesaid Account Payee Cheque can not be encashed through the counter. You have to deposit it in your bank.

What are the cheque bounce charges?

Cheque issued by the customer –₹350/- (for one cheque return per month); ₹750/- per return in the same month for financial reasons. ₹50/- for non-financial reasons except for signature verification for every cheque return for financial reasons.

Who is the payee of a cheque?

When you write a cheque, you’re the payer and the receiver of the cheque is the payee. Cheques are generally valid for 6 months from the date written on the cheque unless a shorter period is otherwise stated on the cheque.

Who is the party upon whom the drawer writes the cheque?

Drawee is the party upon whom the drawer writes the cheque. Drawee is usually the bank and the drawer orders the bank to draw the amount So, in case of an account payee cheque, the payment will be made only by depositing it to the payee’s account. How to write an Account Payee Cheque?

What happens if you bounce a cheque twice from the bank?

In addition, the banks also have the right to close the guilty person’s account (on repeated bounce cheque offence) or stop their cheque book facility. The bank may also charge a penalty to both the drawer and the payee for the inconvenience, extra paperwork and wasting the bank’s time. Cheque Bounce Penalty by Popular Banks

What happens if cheque is dishonoured by the bank?

As per the Negotiable Instruments Act, 1881, if a cheque is dishonoured by the bank due to insufficient money in the bank account of the drawer then it is criminal offense.