Types of cheques

What different types of cheques are there? Which are most frequently used?

  • Bearer cheque. A cheque that can be cashed by whoever holds it (the bearer).
  • Order cheque. A cheque that can only be cashed by the person or company whose name appears on the cheque. This type of cheque can be transferred to someone else by endorsement by the original payee writing the name of a new one on the cheque and signing it. Order cheques may be marked “negotiable”, which specifically allows it to be endorsed or transferred to another person, or “not negotiable”, so that it cannot be transferred by endorsement.

 Some types of cheques must meet certain conditions to be cashed:

  • Crossed cheque. Can only be cashed at a bank, which will handle taking payment from the drawer (i.e. the person who wrote out the cheque).
    “Crossing” a cheque means drawing two parallel lines on the front. It can be crossed by the issuer (drawer) or the holder (payee or bearer). If you have an account with the drawee (the bank responsible for paying the cheque), you should be able to encash it directly, without having to pay it into your account.
  • Account payee only cheque. Can only be cashed by depositing in a bank account.
  • Certified cheque. The bank against which the cheque is drawn verifies that the drawer has the necessary funds to allow the payment to be made and blocks the necessary amount, plus a fee, to ensure payment can proceed. Some creditors demand this type of cheque to guarantee payment.
  • Banker’s draft. A type of cheque that is signed by the bank, making the bank both drawer and drawee.
  • Cheque drawn against a Banco de España account. The drawee (the party paying the cheque) is the Banco de España and drawer (the person or entity writing out and signing the cheque) is usually a bank

Certified cheques, banker’s drafts and cheques drawn against Banco de España accounts offer most certainty for payees.

  • Withdrawal slip. Although similar, this isn’t really a cheque, but a document the customer signs to withdraw cash over the counter from their own account.
  • Traveller’s cheques. Cheques issued in euros or foreign currency by banks or other non-financial institutions, such as Visa, Mastercard or American Express.
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