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Account Payee Cheque Meaning: What is AC Payee Cheque


Because account payee cheques can be deposited into the account of the named person only. An account payee cheque is a highly secured type of cheque as the specified amount can only be paid to the account holder. The payee cannot endorse the cheque to anyone else. The account payee cheque can only be encashed by depositing at the payee account.

negotiable instruments

Generally, Identification is not required in an A/c payee cheque. Just need to deposit in the payee’s bank account by filing a deposit slip. When the words “or bearer” printed on the cheque is cancelled and the word ‘order’ is mentioned on the face of the cheque, this cheque is an order cheque. An order cheque is payable to the person specified therein as the payee, or to the person to whom the cheque is endorsed. So, the order cheque can be transferred by the payee by signing his/her name on the back of the cheque. The NI act does not talk about the A/C payee crossing.

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Investors are requested to note that Stock broker is permitted to receive/pay money from/to investor through designated bank accounts only named as client bank accounts. Stock broker is also required to disclose these client bank accounts to Stock Exchange. Hence, you are requested to use following client bank accounts only for the purpose of dealings in your trading account with us. The details of these client bank accounts are also displayed by Stock Exchanges on their website under “Know/ Locate your Stock Broker”. Two crossed parallel lines at the top left corner of a simple cheque, is Crossing of Cheque. You can not encash this cheque through the counter.

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The money would go to the bank account of the Payee. A/c Payee cheque should provide because it instructs the bank to pay only in the a/c of the named person and this is safe for you. First, the payee visits the bank and deposits his cheque in the bank.

Stale Cheque:

When the receiver of Crossed Cheque has to pay someone, he can transfer that cheque to his Creditor. However, this act will create a problem for the payee, because then he would be bounded to deposit the cheque only in that account. Bearer cheque is a direction to the bank to pay a certain amount to the holder of the cheque. Therefore, anyone can encash the Bearer Cheque over the counter. Though, Account Payee Cheque is a type of Crossed cheque. A cheque having two parallel crossed lines only at the top of the left side of it, it is a Crossed Cheque.

An individual may use an account payee cheque to pay rent or a mortgage. In both cases, the cheque can only be deposited into the account of the person or entity that the cheque is made out to, providing added security and peace of mind. If you receive an account payee cheque, remember you can’t cash it through the counter. You have to deposit it in your bank account with the cheque deposit slip.

A payee is a person or entity to whom you make the actual payment, and their name appears on the cheques. The APC is a super security form of cheque since one can put money only into the payee’s accounts, and the recipient does not have permission to mark this cheque for anybody else. To further understand the notion, one must first distinguish among the three terms mentioned below.

Who can withdraw the A/c Payee cheques?

When a cheque is not crossed, it is known as an open cheque or an uncrossed cheque. The payment for these kinds of cheques can be obtained from the bank counter. An open cheque can be a bearer cheque or an order cheque. An endorsement is ‘special’ or in ‘full’ if the endorser, along with his signature also mention the identify of the person to whom or to whose order the payment is to be made. A restrictive endorsement locations a constraint on how the funds are dealt with. Stamp Makers.in is the leading online rubber stamp provider in India we provide various kind of stamps like Preinked Stamps, Self Inked Stamps, Ordinary Seals etc.

  • However, these cheques are risky because they can be misused.
  • In case of a crossed cheque, the payee is free to make further endorsements.
  • In these cheques, the words ‘or bearer’ is cancelled.
  • This kind of endorsement allows the payee entry to the funds both via a money payout or to have the money deposited into the payee’s account.
  • Because the holder of Crossed Cheque has two options.

One can mention ” account payee ” between the two lines on the upper left side of the cheque. One can mention “account payee”, and the words one must write on it are Account Payee or A/C payee. In case of a bearer cheque containing a withdrawal amount of above Rs 50,000, the bank must verify the identity and address of the individual before disbursing the cash. In case of a crossed cheque, the payee is free to make further endorsements.

Any failure by the paying banker to pay a crossed cheque shall be punishable by liability as defined in Sec. 129 of the Negotiable Instrument Act. Care and Attention- A banker must not pay a cheque by ignoring the crossing since it is not legally justified to pay the payee in cash over the counter. For general Crossing- Sec. 126 of the Negotiable Instruments Act states that crossed cheques are usually only paid to a banker. He can also add the words “non- negotiable” to crossed cheques in general and in particular.

Moreover, the new a/c payee can also deposit or endorse it to another person and so on. No matters, the name of the first holder is written on the cheque. Because the holder of Crossed Cheque has two options. Either he can deposit it or can endorse it to any other person by writing the appropriate instructions at the back of the cheque.

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The banker’s name is added across the face of the cheque. If the cheque is written between the two parallel lines, the words “Not Negotiable”. He is also entitled to cross a cheque, especially if the same is generally crossed. The holder of a cheque is authorized to cross a cheque, either in general or in particular if the cheque is not crossed.


The money is paid if the drawer has a fund in his account. Yes, the person whose name is mentioned over the cheque can deposit the cheque into his bank account. And this cheque can not be encashed or transferred to a third person. This is all from my end on account payee cheque meaning.

What Is the Account Payee Cheque Clearance Time?

Although the words ‘ account payee’ is not mentioned in the Negotiable Instrument Act, they are still considered to be part of the law because of their widespread practice and use. A double-crossed cheque shall be paid by the banker if the second banker acts only as of the agent of the first collecting banker and this is clearly stated on the cheque. I.e., Crossing must specify that the banker to whom it was particularly crossed again acts as the first banker’s agent for the purpose of collecting the cheque. Introduction Endorsement means signature of the holder made with object of transferring the document. The signature & message on the back of a cheque to either cash it, deposit it or to handover the rights of the cheque to someone else.

The paying banker is not authorized to send the proceeds of a crossed cheque to the payer or the cheque holder. Cheque was simple cross by two line, bearer word struck out.payee name in cheque as m l saha but collecting bank a/c name mohanlal saha. No sign or mobile no by payee back side of cheque.on back side of cheque nothing else except drawer (a/c holder) sign.

Records of beneficiaries can be tracked due to https://1investing.in/ by an A/c payee cheque. It gives instructions to deposit the amount in the bank account of the named person only. It takes two business days for most cheques to clear. Cheques may take longer to clear depending on the amount, your relationship with the bank, or whether it’s a one-time deposit. When the money become accessible, you will receive a receipt from the teller or ATM.


Most checks have a 1.5-inch section for you to write in. Only that person would get the payment whose name is written on the cheque. That’s why we write the words A/C Payee Only on the cheque so that any other person can’t not encash it. However, you can not encash both the cheques through the counter. Drawer’s bank will check the signature and process the payment.

Safe and Secure Payments.Easy returns.100% Authentic products. Stamps on Click is a registered firm in India making all varieties and types of Rubber Stamps, Pre- Ink Stamps, Self – Ink Stamps, Dater Stamps, Multi- color stamps and Embossing Seal. The main purpose of Cancelled Cheque is to give proof of holding an account with the bank. However, if Payee’s account and Drawer’s account are in the same branch and in the same city.