It is important to know how to write a cheque, as it helps in situations where you have to make payments using a cheque. When it comes to modes of payment, cheques are the most common. However, people have taken to modern means of payment like debit and credit cards, online transfers etc.
A cheque is a dated, signed, and written order instructing to pay money to a named person or entity. To write a cheque in Canada, there are a number of things to follow.
First, date the cheque, then carefully write the correct name of the payee. Write the amount in figures and words, respectively. Go ahead and write a short note of what the cheque is for and then sign.
It’s important that you write your cheque correctly, as it’ll be rejected if anything in it is wrongly written. Keep reading as we explore how to write a cheque, the pros and cons and other related and helpful information.
Writing a cheque is very simple, even though many make mistakes. Here’s a guide on how to write a cheque.
The reason for dating a cheque is to signify the day it was written and when it should be cashed. It is usually written at the top right corner of a cheque. The validity of a cheque is 6 months, after which you can’t cash it anymore.
This is another important entry to fill in when writing a cheque. You have to ensure that you clearly write the correct spelling of the person’s name. A payee can be a person, a school, an NGO, or any organization with a bank account.
It is important to note that failure to fill in the payee’s name can amount to someone else cashing it if they lay their hands on it.
In addition, you shouldn’t use abbreviations or acronyms when filling this field unless the person or organization uses it officially in their name.
Just beside the dollar sign, you have to write the amount you want to be withdrawn from your account in words. When writing, remember to add Cent and two decimals after the period. For instance, write “$150.30” and not “$150.3.
Next, write the amount in words just underneath the payee’s name. Since you’re paying $150.30, you’ll write One hundred and fifty dollars and thirty cents.
In a situation where the amount in figures doesn’t tally with the one in words, the cheque will be cashed using the amount in words. Filling this field should be easy if you know how to write a cheque RBC( Royal Bank of Canada).
Writing a memo simply means writing a short note telling why that cheque should be paid. For example, “furniture purchase” or ” electricity bill” could be the reason for paying the cheque.
Although it is optional, writing a memo helps both parties to avoid misunderstandings and confusion. This is possible through the keeping of records of payments and receipts.
The final step is to sign the cheque. When signing, ensure that your signature is clear enough and matches the same you provided upon opening the account.
If you don’t sign the cheque, it’ll be invalid and will not be cashed. This is an important step in how to fill out a cheque.
You’re to sign at the bottom right corner of the cheque as that is the right place allotted for signature. Signatures are used to rectify mistakes and substitute names and amounts on the cheque.
Let’s explore the pros and cons of writing a cheque.
Just like every other thing, filling out cheques has some benefits too; they include:
Although cheques are not used regularly, they serve a number of functions. Such functions include donations, bill payments, gifts etc.
As opposed to small amounts of money, cheques are typically used for huge amounts of money.
This is one advantage of using cheques, as you don’t need to walk around carrying cash. It reduces the risk of money being lost or stolen.
In a situation where a cheque gets stolen or lost, it is possible to stop the payment. To do this, you need the basic details of the cheque, such as the date, cheque number and amount. If someone tries to cash the cheque at any point, it won’t go through.
Cashing a cheque is to gain access to the cheque amount by depositing it in your account. It’s either the money deposited in your account or given to you in cash. In Canada, there are two ways to deposit or cash a cheque.
This is where you walk up to the teller and hand them the cheque. Then they confirm your details and deposit the money into your account.
You can also go to an automatic banking machine; all you need to do is choose the option to deposit the cheque. After that, choose the account you want to deposit into, insert the cheque, confirm details, and press deposit.
To use your mobile device to deposit a cheque, follow the instructions of your bank app. First, choose the option to deposit a cheque, then take a picture of the cheque(front and back). Proceed by confirming the deposit details and storing the cheque till it is cleared.
Mistakes are inevitable! There are times when you make mistakes while filling out a cheque. It could be a wrong spelling of the payee’s name or an error in the amount. Whatever the mistake is, it can result in your cheque being rejected or funds being transferred to someone else.
If the errors are correctable, simply cross out the text horizontally, rewrite it, and sign against such correction. This will enable the bank to know that you approve of it. For uncorrectable mistakes, simply write VOID across the cheque in bold and discard it.
Finally, to avoid mistakes, you should take notes of these things and be careful when writing or filing a cheque. And that’s essentially how to fill out a cheque.
Dishonoured cheques are those that don’t go through and aren’t paid. There are various reasons why a cheque can be termed dishonoured; they are:
Any cheque used to identify a cheque that can’t be used anymore or is invalid is referred to as a void cheque. Void cheques are empty or written cheques with the word “VOID” written across them.
When a cheque is said to have “VOID” written in it, it’ll be rejected and not cashed by the bank. The reason why it’s important to write “VOID” on a cheque you no longer need is to prevent someone else from cashing it.
If you know how to write a cheque in Canada, writing a void cheque will be easy for you. To void a cheque, write “VOID” boldly across the cheque. This will tell anyone that such a cheque can’t be used and thereby rendered invalid.
There are some simple steps to follow if you want to keep your cheques safe. These steps include:
After your cheque is deposited at the bank, you might need to wait for some time before you can have access to your money. This enables the financial institution to check thoroughly and ensure there are no errors in the cheque.
Usually, you might wait for 4-8 days before accessing your funds. The amount of time depends on the amount of the cheque and how the deposit is made.
These limits are applicable if the cheque is :
For amounts of $1500 less, if deposited in person, holds are usually 4 working days. If through the use of a mobile app or an ATM, it takes 5 working days. While for amounts $1500 upwards, if deposited in person takes 7 working days. But if through the use of an ATM or mobile app, it takes 8 working days.
Knowing how to write a cheque in Canada is pretty easy, provided you know all it entails. Even though a cheque isn’t the most common means of payment, it is important to know how to write one.
Therefore, before writing a cheque, make sure to have the necessary information you need to avoid making mistakes that will get the cheque rejected or void.
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First, write the date(day, month, and year) at the top right corner, then proceed to include the recipient's name. Then, write the amount in figures, but next to the dollar sign in the box, on the second line, write the amount in words. Next, write a short memo stating what the cheque's for and then put down your signature.
Writing a TD cheque involves the same process as writing any other cheque in Canada. Toronto Dominion (TD) has customized cheques for its customers, so you'd have to order them first before writing them. Like other banks in Canada, you must write the date, payee's name, amount and signature to fill out a TD cheque.
A cheque is only valid for six (6) months in Canada; after this time, it becomes invalid. As such, banks will reject it and not cash it.
Writing a cheque RBC is the same as writing every other cheque in Canada. Make sure you date the cheque, write the recipient's name and amount in figures and words, and then include your signature.
If you have cents as part of the amount you're using the cheque to pay, there are two ways to write it. First, write the amount in figures with the cents in the box with the dollar sign. Therefore you'd write 150.30. In addition, the second way to do it is by writing the same amount in words. For instance, since you're paying $150.30, you'll write "One hundred and fifty and thirty cents." Another way to put it is to write "One hundred and fifty dollars and 30/100".
Post-dating a cheque is easy; you only need to write a date later than when you're writing the cheque. For instance, if you want to post-date to the 5th of March, and the date is the 1st, you just have to write "March 5th". This means that the receiver will have to wait till the 5th to cash the cheque.
This is when someone else other than the person whose name appears on the cheque cashes a cheque if it is counter-signed. Only some financial institutions accept counter-signed cheques, so before you go ahead, check to see if they accept such.