12 things you should know about cheques
Cheques are a form of payment that is still used across the world, from developing countries to developed nations. It can be hard to remember why they’re still around and what exactly they’re good for, but it’s worth taking a look into them!
Cheques are still used across the world, from developing countries to developed nations. It can be hard to remember why they’re still around and what exactly they’re good for, but it’s worth taking a look into them!
What is a cheque?
A cheque is an order on your bank to pay someone money. This means that you don’t need cash in order to give someone money with a cheque. You just need some funds in your account or that you can transfer over electronically.
How do I write one out?
If you want to write one out by hand, there are certain steps that you should follow:
- Write the recipient’s name and address at the top of the page
- Write the date
- Write the cheque number
- Write “pay to the order of”
- Write out a line where you put in the amount that you want to pay and then sign your name at the bottom.
If you don’t want to handwrite one, there are other options! It’s possible to print them online, or to even send an electronic email] that is used like a cheque. In most cases the payee will still receive the money when they cash it.
How long can I hold one?
There’s no limit on how many days you can hold on to your cheque before using it. This means that if you’re expecting a big payment (like your salary) but don’t want to go out and spend it all right away, you can hold on to the cheque for when you really need it.
How long does it take to clear?
When someone cashes in their cheque at the bank, the money will be made available immediately (unless they’re closed). This means that you can use it immediately, but always double-check with your recipient to make sure they accept electronic payments and aren’t waiting for a physical one.
Are there fees associated with using cheques?
If you want to use a cheque you need to either pay someone in cash or transfer some money over to your account so that you have the funds available. As a result, there are sometimes fees for using cheques; usually these are directly associated with how much money is in the cheque.
What is “NSF” on my cheque?
NSF stands for non-sufficient funds (or an that account does not have enough money in it) and is a term that shows up on cheques when there’s an error. It means that you need to add more funds into your account, and they won’t be able to cash the cheque until you do so.
Where can I get my own?
If you want to make sure that you have your own, simply go to a bank and ask for one. You’ll need to fill out some paperwork as well as attach a photo ID that shows who you are. There’s also the option of going online and printing your own!
Do cheques ever expire?
If the date on a cheque has passed already, it means that the cheque is expired and it won’t be able to clear. You’ll need to write a new one and use it instead.
Can I reuse them?
Yes! Cheques can be reused as long as you change the date and recipient information on top of it. This allows businesses to save money by reusing old cheques that they’ve sent else where.
How do I cancel one?
If you want to cancel a cheque, simply write “cancelled” on the top of it (right below the date). It’s important to let the recipient know that the cheque has been cancelled though; if not they might try to cash it and cause problems.
What is a “stop payment”?
If you want to stop someone from cashing in your cheque, you can put a “stop payment” on it. This means that the bank will refuse to cash your cheque, even if it has already been processed with them.
How do I know how much money I have left to write a cheque for?
If you want to know exactly how much more you can write, call your bank and ask them what the limit would be. They’ll let you know right away if it’s a problem or not!
Can an employee cash a company cheque on their own?
No, this is illegal. If you’re an employee that has written a cheque to someone else for work, then you need to either take the money out of your account or give it to another co-worker who will do so for you. The only exception is if there’s no other option and the owner specifically tells you to do so; in this case make sure you get it in writing!
What if I accidentally write an incorrect amount?
If you make a mistake on the cheque (like putting down $43 instead of $53) then take the cheque to the bank right away. They’ll be able to tell you what needs to happen, but might just ask for a new one to be made.
Can I still pay someone after their cheque has been cancelled?
Once a cheque has been marked as “cancelled” it means that the money won’t be able to clear and won’t go through for your recipient. You can always try asking them if they know of another way for you to pay them (like in cash), but if not it might be best to go with an alternative method like money order.