What is a Bank Cheque (BC)
The Financial Dictionary defines a Bank Cheque as “A check drawn directly on a customer’s account, making the bank the primary obligor, and assuring firm that the amount will be paid”.
A bank cheque, bank draft of teller’s cheque as it is referred to in some countries is a bank instrument that serves as a medium of exchange drawn on the account of a bank customer and guaranteed by a bank who owns the instrument as a form of payment for goods and services or settlement of debt.
It is issued at the request of the customer, who immediately pay for the value of the bank cheque plus the applicable fees and charges either by way of debit to his or her account or cash payment. The money is immediately removed from the customer’s account and transferred to the bank account from where the cheque will be given value when presented for payment by the beneficiary.
A bank draft once issued by a bank becomes an obligation on the bank to honor once presented on them from clearing. Except if the draft is forged, stolen or the bank is liquidated before it was presented. The draft can however be canceled by the drawer who may report to the bank if it is stolen or lost and once the bank verifies that the draft has not been presented for payment or cashed, it will be cancelled.
Here Are 6 Reason Why You Need A Bank Cheque.
1. Bank guarantees payment
You need a BC when you want to provide your customer or business partner some level of confidence that you have enough fund to make the payment due to them. Some of your business partner may demand that you issue them a bank cheque in payment for good and/or services for the same reason. A BC never bounces or dishonored for any reason. The bank issuing the Cheque has added its guarantee to the instrument that it will not be dishonored.
2. Good for large payments
A bank Cheque is most suitable for large payment other than bank transfer or issuing your own cheques. However, the maximum amount that can be written on a cheque in line with CBN regulation is N10 Million. The total amount will have to be split into two or more BC depending on the amount involved but bank cheques still provides the comfort for large payment because of its reliability.
BC gives you the needed convenience in business and personal dealings with clients and principals. With the bank guarantee behind the draft you can be assured that you have the payment due to you and so will your partner or principal. Just walk into your bank or any bank and ask for a bank cheque to experience the convenience that come with this special banking instrument.
BCs can neither be forged or duplicated. It has serial numbers and other features that your bank will immediately verify before giving value to the instrument. Unlike issuing your own cheque where your signature can be forged or your cheque duplicated and you may unknowingly authorize your bank to pay. A stolen bank cheque can be traced even when presented for payment because it was written in favor of a person or organization and it has serial numbers that can be verified.
Paying for goods and services or getting paid with a BC is as good as paying or getting paid with cash. Business or transactions can quickly be concluded because of its reliability and bank guarantee involved. You may not need to wait for your bank alert, confirmation of your account officer before concluding transaction once a bank cheque is involved. Please note that bank cheques can also be forged but you can be assured that a forged bank cheque won’t go through the clearing process without your bank intercepting it.
It comes with duplicated for acknowledgement. The duplicate has all the security features of the original cheque, so you can get evidence of payment from your client or acknowledge payment for your client as the case may be so you don’t have to look for a photocopier or scanner for acknowledgement.
Kindly approach your bank today for a bank cheques and experience comfort, convenience and reliability of this banking product.
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