A cross cheque directs the bank to deposit the money only into the account of the payee (the person named on the cheque). This makes it safer than a regular (open) cheque, which can be encashed over the counter by anyone who holds it.
Features of a Cross Cheque
- Two parallel lines are drawn on the top left corner of the cheque.
- Sometimes includes the words:
- “A/C Payee” – ensures funds go only to the payee’s bank account.
- “Not Negotiable” – restricts transferability.
- Cannot be encashed directly at the bank counter.
- Must be deposited into a bank account.
Why Use a Cross Cheque?
- Safety: Prevents misuse if lost or stolen.
- Traceability: Funds are deposited into a traceable account.
- Used for large payments, salary payments, or official transactions.
How to Cross a Cheque
- Draw two parallel lines on the top left corner.
- Write “A/C Payee” between the lines (optional but recommended).
- Fill out the cheque as usual—amount, date, payee name, signature.
FAQs
Can a cross cheque be endorsed to someone else?
A: No, if marked “A/C Payee”, the cheque cannot be transferred to another person.
How is it different from a bearer cheque?
A. A bearer cheque can be cashed by anyone holding it. A cross cheque ensures funds go only to a specific account.
Key Takeaway
A cross cheque is a safer way to pay someone, especially for larger or formal transactions. It ensures the payment goes only to the intended recipient’s bank account, offering both security and accountability.
