A holder cheque is perhaps the most prone to fraud, but an APC is a very safe document. It is essential to understand the various methods of drawing the line on cheques to fulfil the proper task. This is a type of cheque in which the bank deposits the amount directly into the payee’s account. Nevertheless, in this type of cheque, the payee can give the approval or authorisation for the third party, and further, the third person can recommend it to somebody else. You can complete such recommendations by mentioning the endorsee’s name on the cheque and providing your signature on the reverse side of the cheque.
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The drawer is supposed to leave an instruction to the drawee to deduct a sum from their bank account. There is no specific limit on the amount for an account payee cheque. However, the bank may have their own policies regarding large transactions.
An account payee cheque has several features that make it a secure method of payment. Firstly, the cheque is marked with two parallel lines on the top left corner with the words « Account Payee Only » written between them. This marking ensures that the cheque can only be deposited into the bank account of the payee. This endorsement restricts the cheque from being cashed over the counter, making it one of the safest types of cheque for transferring funds. Whenever you get an APC, keep in mind that you cannot cash it at the countertop.
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Typically, they are the people whose account the recipient withdraws money from, demonstrating their authority. Summing up about the differing types of cheques, ensure to issue the cheque as per the requirements, whether your purpose is a further endorsement or not. The correct placement for indicating “A/C Payee Only” on a cheque is the top left corner. Draw two parallel lines there and neatly write “A/C Payee Only” in between.
Post-dated Cheque
- If you ever receive an account payee cheque, it is not possible for you to cash it instantly.
- Such cheques can be cashed by the person holding them over the counter.
- There is no specific limit on the amount for an account payee cheque.
- This not only causes delays but can also result in penalties for both the drawer and the payee.
Despite technological advancements in the financial vertical, cheques continue to remain a popular way of initiating transactions. An account payee cheque is a cheque drawn in favour of a payee’s bank account. When you issue such a cheque, the issuer must deposit it with their bank. The bank then clears the cheque within a few days and the funds are transferred from your account into that of the payee named on the cheque. When you see “A/C Payee Only” on a cheque, it indicates that the amount on the cheque can only be deposited into the bank account of the individual specified on the cheque.
Cheques are referred to as crossed cheques when the A/C payee is not written between the lines placed at the corners of a cheque. The back of the crossed cheque can a/c payee be signed to obtain cheque endorsing assistance. However, once the account payee is written, the cheque cannot be endorsable. If the cheque’s payee is unable to visit the bank, he may choose any other individual to receive the money. In this instance, the person receiving money through a cheque has the option of transferring that money to any other account as well.
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