Cheque Tips: Digital is prevalent in India. Now most people in the country have started using digital payments. But even today many people use cheques for big transactions. In such a situation, it is very important to keep many things in mind while issuing a cheque. Even a small mistake can lead to huge losses.
Carelessness with cheques in haste can prove to be costly. Cheques are powerful financial instruments that facilitate money transactions. Before signing any cheque, you should know who the person to whom you are giving the cheque is and what is its purpose?
A signed cheque can be misused at any time. Sometimes the amount is filled in it and the money is withdrawn. This can cause you to suffer huge financial losses. However, there are many small things that can be kept in mind to avoid unnecessary difficulties.
Keep these things in mind before signing the cheque
Always write the correct date on a check
While issuing a cheque, the date should be correct. The date should match the day on which you are issuing it. This is most important. It saves you from a lot of confusion. It tells you when the cheque can be encashed. Entering the wrong date can also lead to the cheque being rejected by the bank. Apart from this, it is also very important for maintaining accurate financial records.
Use permanent ink on checks
To avoid tampering with the cheque, permanent ink should be used so that it cannot be altered by cutting or editing it later. This can also save you from fraud.
Maintain sufficient balance in your account
If the check bounces, you may have to go to jail along with paying a fine. Check bouncing is considered a legal offense in the language of the court. There is also a provision for punishment under the Negotiable Instruments Act, 1881. When a bank rejects a check for some reason and payment is not made, it is called check bouncing. The reason for this is mostly not having enough account balance. It is very important to have enough money in your account at the time of issuing the check.
Always write the correct name on the cheque
Write the name of the person to whom you are issuing the pay cheque in clear words. A correctly written name will ensure that the cheque reaches the right destination. Mistakes in writing the name can lead to delay in clearing the cheque. It can also be rejected by the bank.
Pay attention to the signature while issuing the cheque
Whenever you sign a bank cheque, remember that you have to sign in the same way as it is already recorded in the records of the concerned bank branch. Many people keep different signatures for different banks. If you have also done this, then be careful while signing a bank cheque.
Do not keep too much space between words and numbers in the cheque
Whenever you make payment to someone by cheque, do not leave too much space between the words and numbers regarding the name and amount. Too much space can increase the chances of tampering with the name and amount. Apart from this, check that the amount filled in words is the same in figures as well. Banks will accept the cheque only when the amount matches in both ways, otherwise the cheque will be rejected.
Do not sign a cheque and give it to anyone
Never issue a blank cheque to anyone, no matter how trustworthy the person is. The reason for this is that any amount can be filled in it. If the relationship deteriorates or the other person changes his mind, he can empty your entire bank account.
Keep the check details with you
Whenever you make payment to someone through a bank cheque, make sure to note down the details of that cheque such as cheque number, account name, amount and date. This information can be useful when you need to cancel the cheque. Apart from this, you also get to know whether any cheque has been misplaced or whether someone has taken a cheque from the cheque book without your knowledge.
