Composing a Check: A Quick and Easy 6-Step Guide.

While online money management, mobile banking, and digital payments are commonplace in the world of finance, sometimes you may need to rely on conventional methods of handling money – enter cheques. Despite their seemingly complex appearance, filling out a cheque is actually quite straightforward. Here’s how:

How to write a cheque: 6 steps

1. Commence by writing the date in the top right corner, beside a designated space or line with the label “Date.” Be sure to write the exact same date as the one on which you signed the cheque.

2. Next, write the recipient’s name in the space beside “Pay to the order of.” For a person, use their first and last name, while for a company, ensure you have the correct payment name and only use acronyms as instructed. You can also write “cash” in this space, allowing anyone to take the cheque to the bank and withdraw the cash from your account.

3. Write the numerical amount. Beside the dollar sign ($), write the amount to be withdrawn from your account using numerals. Even if it’s less than $1, write $0 and include the amount of cents, even if it is zero. Do not include the cents sign (¢) and ensure that you include two decimals. For example, if the cheque is for fifty cents, write $0.50, not $.50, $.5, or 50¢.

4. Write the amount in words. Although this isn’t a legal requirement, it’s best to spell out the dollar amount in words below the recipient's name, including the cents as a fraction like 25/100 or 89/100, to avoid ambiguity. If the cheque has a fraction pre-printed with a blank numerator, write the cents in the blank. For amounts less than $1, write “zero dollars” before the cents. If the word “dollars” is already printed on the cheque, there’s no need to write it. It’s also advisable to draw a horizontal line connecting the dollars to the cents to prevent anyone from altering the dollar amount.

5. Sign the cheque in the bottom right corner. Without your signature, the cheque is invalid.

6. Optional: Fill out the memo section. Here, you can note what the cheque is for, such as rent payment, reimbursement for business expenses, or security deposit – this isn’t mandatory, but it can help remind the recipient of its purpose for record-keeping purposes.

Remember to sign the cheque! A complete and accurate cheque should resemble the one below."

After filling out your cheque, tear it off and keep a personal record. If you have a carbon-copy cheque book, give the top copy to your recipient and keep the lighter copy. If your chequebook doesn't come with carbon copies, use a register to keep track of the transaction details. It can either be included in the book or bought separately.

To ensure readability of the cheque, use dark ink and avoid writing in bright or unusual colors. Writing clearly helps with quick identification, especially if the paper has faded or been scanned as a digital image.

To void a cheque, write "VOID" in large, clear letters, covering all the primary fields of the cheque. This is useful when paying someone for verification of bank account information or if you wrote the wrong amount on a cheque.

When writing a cheque to move money from one account to another, write your own name in the "Pay to the order of" field and endorse it with your signature on the back before depositing it.

If you make a mistake while writing a cheque, cross it out with a single horizontal line, write the correct information above it, and initial the change to indicate your approval. But for consequential mistakes, like writing the wrong amount, void the cheque and write a new one instead of making the correction.

A Comprehensive Guide on Writing Cheques and Keeping Them Secure

How to Write a Cheque Payable to Cash

Cheques are generally considered a safer payment option than cash as only the specified payee can cash them. Yet, if you ever find yourself in a situation where you need to write a cheque payable to cash, here's what you need to do to ensure that the transaction goes as smoothly as possible:

1. In the top right corner of the cheque, fill in today's date.

2. Write "Cash" in the "Pay To The Order Of" section.

3. Next to the "$" symbol, fill in the amount of money that you would like to withdraw.

4. On the blank line underneath the "Pay To The Order Of" section, write out the amount you wish to withdraw in words.

5. If necessary, add a note in the "Memo" section to indicate why you are taking out cash.

6. Complete the process by signing your name on the blank line at the cheque's bottom right corner.

Please note that it is generally not advisable to write cheques payable to cash as anyone can cash them, whether you authorise it or not.

How to Keep Your Cheques Secure

While electronic payments are usually considered more secure than cheques, you can still follow certain guidelines to ensure that your cheques remain safe:

1. Write in pen. Pencil can be easily erased or altered, giving someone else the opportunity to change the cheque's details.

2. Regularly check your account balance to make sure that there are no unauthorised withdrawals.

3. Don't sign an incomplete cheque. Blank cheques can give unauthorised people unlimited access to your account. Always bring a pen with you to fill out the cheque if you are unsure of the payee or amount.

4. Draw a line through any unused spaces on the cheque to prevent unauthorised additions or alterations.

5. Try to maintain consistency in your signature to make it easier to spot forgeries.

6. Avoid writing cheques payable to cash as anyone can cash them.

7. Shred any cheques that are no longer useful, such as cheques from old accounts.

With digital banking becoming more prevalent, it is now possible to make payments and transfer funds without writing a cheque. In fact, about 88% of Canadians now bank online. You can consult our guide to digital banking to find the best online banking provider for your needs.

Understanding Cheque Numbers

The numbers on a cheque serve as a roadmap to your account, allowing the recipient to withdraw the specified amount. The cheque recipient will deposit the cheque at their bank, and the rest of the process will be handled electronically through Canada's clearinghouse and settlement systems.

The cheque number informs the order of cheques in your cheque book, with the first being 001, the second 002, and so on. The transit number identifies the bank branch where you opened your account, much like the 9-digit routing number used by American banks. However, transit and routing numbers cannot be used interchangeably. In some cases, online banks without physical locations may assign all customers the same transit number to avoid confusion. The institution number, also called the bank number, identifies your financial institution, while the account number identifies your specific account. To explore methods for moving your money, click here.

Compare Chequing Accounts

While online or mobile payment is often preferred, cheques remain a simple method for making payments. If you don't have a cheque book on hand, your bank may be able to print one off for you. For more information on chequing accounts and their features, refer to our helpful guide here. Cheques at or below $1,500 have a holding period of 4-5 days, while cheques over $1,500 may take 7-8 days, although they often clear sooner. If you have an established banking relationship, you may be able to process the funds quickly through a teller.

To deposit or cash a cheque, endorse the back with your signature and bring it to your local bank branch, or deposit it using a compatible mobile banking app. To perform a mobile deposit, navigate to the cheque deposit screen in your banking app, follow the prompts, and submit pictures of the front and back. Include the deposit amount and desired account, and your cheque will be processed.

Payments Canada regulates clearing and settling financial transactions in Canada and states that regular cheques and provincial government cheques become stale-dated after six months and cannot be deposited. However, banks may choose to honor stale-dated cheques at their discretion. Money orders, bank drafts, and federal government cheques never become stale-dated.

Regarding name matching, Payments Canada has no official policy, and individual financial institutions determine their policies. Most banks accept cheques made out to a maiden name if you can provide proof of identity, such as a driver's license or passport, and your marriage certificate.

When filling out the numeric box, write out the full dollar and cents amount, such as "$1452.73." In the text box, write out the dollar amount and place the cents on the far right where the cheque shows /100 Dollars, such as "one thousand, four hundred and fifty-two 73/100." See our sample cheques for more information.

Crafting a void cheque for the purpose of receiving payment via direct deposit is a straightforward process. The primary fields of the cheque can be effectively covered by inscribing the word "VOID" in a large, clear font. Alternatively, if you use online banking services, the option to download and provide a void cheque directly to a landlord, employer, or other entity may be available.