But in reality, it is not always advisable to issue a post-dated cheque. This is because there could be possibilities that you may not be able to honour the cheque on the given future date.
The possible reason could be expected funds have not come into the bank. On the other side, the recipient may not be aware of this and he may deposit the cheque into bank resulting in a cheque bounce. This will not cost you in terms of additional charges that a bank may charge you but a loss of credibility and relationship that has been built so far.
Today, most of the banking process has been automated and banks rarely look at the date mentioned on the cheque. Sometimes, this may also possibly lead to cheque bounce. Issuing a post-dated cheque also involves a process of informing the bank with the written instructions which are cumbersome. To add to it, each bank has different policies monitoring and preventing premature payment. If you have an option to exercise, then it is best to avoid writing a postdated cheque.
Even if your payee the recipient is honest, they may make the honest mistake of forgetting and leaving you with bad cheque fee. In those circumstances, instead of writing a postdated cheque, you can try the following:. To make the situation little more interesting, you may have received the post-dated cheques promising to honour the payment on a given date.
You might have considered this as well in issuing a post-dated cheque. Now, you are in a situation where you have one or more post-dated cheques received as well as issued? This requires you to track and manage the post-dated cheques. Also, you need to have a special accounting treatment so that the transaction will automatically affect the accounting books on the date of the post-dated cheque. TallyPrime, comprehensive business management software facilitates the smooth management of post-dated cheques.
The post-dated cheque management feature supports the following:. Treasury such as federal tax refund checks are void one year after the issue date. You must contact the IRS for a reissue if you find an old refund check sitting in the back of your desk drawer. The fee varies from bank to bank. The fee might even be higher for international checks.
A court decision in the case of Aliaga Medical Center, S. Harris Bank N. You could end up responsible for the deposit item return fee if the reason she wrote the notice was because the funds would no longer be available after those 90 days.
Someone who wrote a personal check is probably not prepared for the hit his checking account balance will take if you cash it months later.
Call or text the person to let him know your intent, especially if the check was issued by a friend or family member. Depending on how old the check is, you may want to ask if the person will write you a new check altogether. How We Make Money. Written by Taylor Medine.
Written by. Taylor Medine. Taylor Medine is a contributing writer for Bankrate. Taylor writes about banking and student loans. Edited By Mary Wisniewski. Edited by. Mary Wisniewski. Mary Wisniewski is a banking editor for Bankrate. She oversees editorial coverage of savings and mobile banking articles as well as personal finance courses.
Reviewed by. Kenneth Chavis IV. Share this page. There have been incidents where blank post dated cheques have been issued, and the courts have promptly rejected these as the cheques become a bill of exchange only if a certain amount is mentioned on the post-dated cheque. It is important to note that a bounced or dishonoured cheque is considered a criminal offence, punishable by a jail term or fines under section of the Negotiable Instruments Act.
Under the provisions of the Negotiable Instruments Act, the legal penalty for the dishonour of a post dated cheque is:. As per the provisions of section of the Negotiable Instruments Act, a legal notice should be issued within 30 days of the date the cheque bounced or was dishonoured. In the absence of a valid response from the respondent, the concerned party must file a case within 45 days from the date of the legal notice.
Post dated cheques are a great way to enjoy products and services before you actually pay for such services and products. They can also be used as security for short term loans. It is also a quick way to continue business operations without having to stop for want of funds.
It also ensures the quality of the product or service. Post-dated cheques now have a validity of only 3 months from the date of issuance. What is the validity of normal cheques?
Like post-dated cheques, normal cheques also have only 3 months of validity from the date of issuance. Is dishonour of post-dated cheques a criminal offence?
Yes, dishonour of post-dated cheques is considered a criminal offence in India. Can I use post-dated cheques as security for short term loans? Yes, if the lender agrees to it, you may use post-dated cheques to secure short-term loans as a means of security.
Which law governs the issuance of post-dated cheques? Section of the Negotiable Instruments Act holds legal standing in legal cases related to post-dated cheques. What is the punishment for the dishonour of cheques? As per provisions of section of the Negotiable Instruments Act, the issuer of a dishonoured cheque is liable to go to jail for up to 1 year or pay a fine equal to twice the value of the cheque or both.
The first one is the blank labelled Pay. This field will hold the name of the recipient or beneficiary of the cheque amount. This can be any name of an individual, business having an account or can be left blank. The name can also be the name of the owner of this account.
In such cases, it becomes what is called a Self-Cheque. In the case of a self-cheque, the name needs to be specifically mentioned as Self.
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