Presentation on theme: "Cheques A cheque is a written instruction by the account holder, to the bank, to pay a stated sum of money to a named person or business."— Presentation transcript:
1 ChequesA cheque is a written instruction by the account holder, to the bank, to pay a stated sum of money to a named person or business.
2 There are three parties to a cheque A ‘party’ is a named person or organisation:Drawer – the person who signs the cheque (the account holder)Drawee – the name of the account holder’s bank branchPayee – the person who the cheque is made payable to (also called the beneficiary)
3 Details on a chequeAmount paid in figures – sum to be paid to the payeeCurrent account number – the drawer’s 8-digit account numberBank sort code – 6 digitsCheque number – each cheque has a unique, consecutive numberNB: In the Republic of Ireland, government stamp duty applies.
4 Details on a cheque, cont’d Date the cheque is written – must not be post-dated (in the future)Name and signature of account holder (drawer)Name of the person to whom the cheque is paid (payee)Amount paid in writing – must match the amount in figures
5 Every cheque has a counterfoil, or ‘stub’ This is the part of the cheque that’s left in the chequebook.Always complete this as a record of your cheque payments and spending:AmountDatePayee (who it was made out to)Check each stub against your bank statement.
6 Refusal of a cheque A bank may refuse to cash (pay) a cheque if: Any information is missingThe cheque is dated in the futureIt is over 6 months old (known as ‘stale’)It is not signed or the signature doesn’t match the copy in the bank’s recordsThe cheque has been altered and not initialled by the account holderThe amount in words and figures doesn’t matchThere are insufficient funds in the account
7 Crossing a cheque makes it safer A bank may refuse to cash (pay) a cheque if it is crossed.‘Crossing’ means drawing two parallel lines across the front of the cheque.Some banks issue their cheques already crossed.Crossing means the cheque cannot be cashed (exchanged for cash at a branch).The cheque can only be paid into the bank account of the person it’s made out to.
8 What should the payee do? If you are taking a cheque as payment you should check that:The cheque has been signedYour name has been spelt correctlyThe cheque is ‘in date’ and not post-datedThe amount in words and figures match
9 Cheque termsBlank Cheque The cheque is signed but the details are missing (no figures)Stale Cheque A cheque that is 6 months oldPost-Dated Cheque A cheque that has been dated sometime in the futureOpen Cheque A cheque that doesn’t have the payee’s name on itCrossed Cheque A way of making a cheque safer by putting two parallel lines across the face of it. It cannot be cashed and must be lodged into the payee’s account.Bounced/Dishonoured Cheque, or Unpaid Cheque A cheque that a bank refuses to accept because it is stale or post-dated, it isn't completed properly or the drawer has no money to back the chequeEndorsed/Negotiated Cheque A cheque that is passed on to someone else by the payee signing his/her name on the back of it