What is an Account Payee Cheque
16 September, 2024
Synopsis
An account payee cheque allows you to make payments to different billers and recipients.
You must draw two parallel lines on the top left corner of such cheques to indicate the account payee status.
Payees, in whose names such cheques are written, must deposit them in their bank and the funds are directly credited in their account.
Before the age of digitisation, if you ever needed to make a payment, you could do it in one of two ways – by cash or cheque. While cash has become almost obsolete in this era of UPI and digital cash wallets, cheque transactions continue to remain popular, especially for business transactions. If you are not using a cheque to withdraw cash, you are most likely writing an account payee cheque. The rules for writing such cheques differ when compared to writing self or bearer cheques. Let’s find out more about AC payee cheques and how to write and deposit them correctly.
What is an Account Payee Cheque?
As the words ‘account’ and ‘payee’ suggest, an account payee cheque is one that is drawn in favour of a recipient or payee, meant to be deposited in the payee’s account. When such a cheque is issued, the receiver is required to deposit it in their bank, typically by filling up a deposit slip. The payee’s bank then requests the drawer’s bank to clear the cheque. Once the drawer’s bank clears the cheque, the amount, as mentioned on the account payee cheque, is transferred in to payee’s account.
How to Write An AC Payee Cheque – The Steps to Follow
The steps to write an account payee cheque are no different, than writing any self or bearer cheque. However, there is one important thing you need to do when writing such a cheque. Here are the steps:
Start by writing the correct name of the payee, who could be an individual, a business entity, or even a utility biller like electricity, telephone, gas, etc.
Enter the applicable date in the date section. Depending on who you are making the payment to, you can enter the current date or a later date, i.e., write a post-dated cheque.
Now enter the amount payable in words and figures in the two amount sections on the cheque and remember to draw a straight parallel line in any remaining space in the amount sections.
Next, you need to sign at the bottom of the cheque in the signature section. If your bank provides personalised cheques, you must sign above your name on the cheque.
The last and most important step is to draw two parallel lines on the top-left corner of the cheque and write the words ‘A/C Payee’ or ‘A/C Payee Only’, between the lines.
Once you have written the cheque, you record the same in the index section of the cheque book. You must write the name of the payee, date of cheque issuance, cheque number, and amount paid.
Account Payee Cheque Deposit – The Steps
If you have received an AC payee cheque and wish to know the account payee cheque deposit steps, we’ve got you covered. Here are the steps.
Visit either your bank branch or your bank’s ATM and obtain a cheque deposit slip.
Fill out the deposit slip providing the requested data like your name, account number, cheque number, name and branch of the bank issuing the cheque, and the payment amount in figures and words.
Write your name, account number, and contact number on the flip side of the cheque and use a push pin or paper pin to attach the cheque and the deposit slip.
Head to the cash/cheque deposit window at the bank, or drop the cheque in the drop-box at the bank or ATM.
The bank will take up the cheque for processing and clear it in due time.
Important Things to Remember About Account Payee Cheques
If you receive an account payee cheque, you cannot encash it over the counter at the drawer’s banks. You may only deposit them in your bank.
Banks typically take 1-4 days to clear account payee cheques.
In some cases (like loan repayments), you may have to present post-dated account payee cheques, which the lender deposits in their account on a monthly basis.
You must ensure you have sufficient balances in your account upon issuing an account payee cheque.
Banks penalise issuers for writing account payee cheques that bounce or dishonoured.
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When you open a Savings or Current Account with HDFC Bank, we offer you a complimentary Debit Card and cheque book, which you can use to make payments seamlessly. You can also order more cheque books through our internet and mobile banking platforms. You can now open your HDFC Bank Savings Account online in minutes, and enjoy its many incredible features. Click here to get started.
*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
