What is Bearer Cheque and How to Write: Meaning, Withdrawal Rules, and Limit

A bearer cheque entitles the person who submits it to the bank to withdraw the money. While visiting a bank, we often notice customers at various counters, out of which some of them are dealing with cheques. But do we ever pause and wonder what type of cheque they are filling or submitting? Mostly we don’t! Either we are in a rush for getting our work done at the bank counter or we have no time or interest to know.

The banking industry, to which we are connected directly or indirectly is a huge sphere and it is updated with information and services at a rapid speed. Right from bank accounts, types of cheques, fixed deposits, investments to types of loans, digital gold and more, you can sure to never miss out on up-to-date knowledge available at digital medias or at the bank if visited in person.

A common man often deals with just the basic activities at the bank, the actions may involve opening a bank account, handling a bearer cheque, depositing cash or such related banking tasks which are simple to understand and even to execute. Speaking about cheques, there are many types of cheques which include- post-dated, self, order, crossed, traveller's, bankers and so on.

Each of these have its distinct characteristics but let’s begin by talking about just one. We have often over-heard discussions among colleagues and friends of what is bearer cheque meaning, though most of us have dealt with this at least once in our life.

Those who belong to the banking sector through profession or educational course, are certainly updated with the detailed knowledge of this industry. However, there is a large set of audience who don’t understand and don’t have even basic knowledge or unanswered question of what is bearer cheque or how to fill it?

Here is a simple explanation! A bearer cheque’s performance simply means that the one bearing the cheque or in other terms the person carrying the cheque is eligible to withdraw the money from the bank. This type of cheque doesn’t consist of a name hence the person presenting the cheque at the bank receives the payment. That means these cheques demand no verification of the account holder and the payment is made to whoever is carrying the cheque. The bearer cheque holder acquires the payment rights at the bank as he/she is bearing this cheque.

A bearer cheque is well referred to as a 'carrier cheque' which don’t require identification at the bank. However, if the cheque amount is large, the bank will conduct a verification process. The treasurer is asked to sign the back of the cheque to authorize receipt of funds from the bank.

It is taken for granted that writing a bearer cheque is a convenient method and doesn’t involve any major concerns. However, we need to correct this assumption because one has to take many precautions while considering how to write a bearer cheque before submitting to the bank counter. In order to avoid any mishaps, let us understand the process or steps involved in writing this cheque.

As we are aware that it is must to include a date in any banking or financial transactions. Even for cheques, the date is the most important and an unavoidable factor, hence filling in the date is the first step. The next step is mentioning the amount that the cheque holder is entitled to withdraw. Then comes the name of the recipient and the signature of the account holder. Make sure to fix the signature in the given space above the authorized signature. None of these steps can be skipped or done wrongly so fill your cheque carefully.

You have to also consider the factors of adding a slash (/) and dash (-) after writing the amount in numbers, for example (15,000/-). If the bearer cheque meaning is well-understood then risk of the cheque being lost or stolen is certainly taken care of. Any unidentified person can withdraw your money, to avoid such risks it is wise to always write ‘only’ after mentioning the amount in words. (Fifteen thousand only). If the information is misspelled, the bank does not accept any type of cheque if you provide wrong or misspelled information. Rechecking of your bearer cheque before submitting is highly important.

Hoping that the above-mentioned guidelines of how to write bearer cheque was quite helpful to you, let’s get to a little more understanding on this subject.

While explaining what the bearer cheque meaning is it specifies that it doesn’t require an authorization. This type of cheque doesn’t demand you to mention the word “bearer” in the cheque, thus guaranteeing a suitable method to receive payments in your account. It has a great feature of getting converted into an order cheque and are transferable only by delivery.

The holder of the bearer cheque does not necessarily have to be the account holder. Just like any other cheques, even the bearer cheque allows you to withdrawn money in favour of an individual or business.

The foremost benefit which one can enjoy is the convenience to receive bearer cheque payments at the counter. Here, it is helpful to deal in small amounts and the negotiation is easy because it does not require permission of the owner. A bearer cheque can be useful to those who don’t have a bank account. They can easily collect payments by cheque from the bank without the need for verification of the signature.

The attractive factor is that bearer cheques don’t have any withdrawal limit. When the amount is less than Rs. 50,000, then the banks don’t perform any verification process and the person presenting the cheque at the bank effortlessly receives the money.

However, if the amount mentioned is above Rs. 50,000/- on such a bearer cheque then it is a rule of the bank to conduct a KYC (know your customer) authentication process. The bank asks for proofs of identity in whose name the cheque has been issued. That means the account holder will be have to prove to the bank if they have issued the cheque. Once the verification is approved and the steps are completed, the bank will hand over the amount to the bearer presenting the cheque.

This article educates you on the basic information of bearer cheque as well as the steps involved on how to write the cheque. The features and benefits too have been explained along with the risk involved while using this cheque. Those who are looking for guidelines or seeking for an idea on this subject can refer this article.