While cheques have been the backbone of all financial transactions for years, not every cheque is the same. Terms like Account Payee Cheque and a Crossed Cheque often resurface in discussions among people, and many are confused when they ask, “What is the difference?
No problem. Here in this blog, we will remove all the mysteries behind those words and give you knowledge on their uses and, consequently, know when to pick one over the other.
What is Account Payee Cheque
Actually the safest method of transferring is through an account payee cheque. When you have written “Account Payee” or “A/C Payee” between two parallel lines on the cheque you are directing the bank to deposit the amount directly to the bank account of that individual or institution whose name appears on the cheque.
An Account Payee Cheque will have the following features
- Direct Credit: The amount gets credited directly to the designated account only.
- No Over-the-Counter Cash: It can not be encased at the bank counter.
- Enhanced Security: It limits the chances of fraud as only the named recipient is allowed to access the money.
Example Scenario: Just think of paying your child’s school fees by cheque. When you write “A/C Payee”, then it reaches only the school account in the bank and thus not anyone else can mis-utilize the cheque issued.
What is a Crossed Cheque?
A crossed cheque also ensures a safe transaction but works slightly in a different way. It will have two parallel lines drawn right across its face, where it will instruct the bank to place the funds into a banking account rather than withdrawing with cash. Unlike an account payee cheque, deposit into a specific account can be restricted by a crossed cheque.
Key Features of a Crossed Cheque:
- Prevents Cash Withdrawal: It cannot be withdrawn by cash over the counter.
- Flexible Deposit: This can be deposited into any account, not necessarily the payee’s account.
- More Instructional Options: You can add terms such as “Not Negotiable” for extra security.
Example Scenario: Assume you draw a crossed cheque for business expenses. He can deposit it into any one of his business accounts without further restrictions. This makes him very flexible but not too secure, compared to the account payee cheque.
Account Payee Cheque vs. Crossed Cheque
| Feature | Account Payee Cheque | Crossed Cheque |
| Purpose | Direct payment to the named payee’s account | Prevents over-the-counter cash transactions |
| Marking | “Account Payee” between two parallel lines | Two parallel lines, no specific wording |
| Flexibility | Limited to the payee’s account | Can be deposited into any account |
| Security | Higher, since it’s account-specific | Moderate, as it’s less restrictive |
| Over-the-Counter Use | Not possible | Not possible |
Why Consider an Account Payee Cheque?
If security and liability are your concerns, consider an account payee cheque. Here are some frequent instances where they are opted for:
- Salary Payments: Guaranteed that the employees receive salaries directly into their accounts.
- Vendor Payments: It ensures payment to the correct recipient.
- High-value transactions: It provides a higher level of security for large financial transactions.
When to use a crossed cheque?
A crossed cheque is more flexible, and it can be applied in situations such as;
- General Transfers: Here the account for deposit isn’t critical.
- Bulk Payments: Suitable for bulk deposit into various accounts.
- Added Instructions: If required, add phrases like “Not Negotiable” for added safeguards.
Also Read: How to Save Money Without Sacrificing Your Lifestyle 2026
How to Write an Account Payee Cheque
Writing an account payee cheque is easy enough, but the attention one pays while writing is what makes all the difference because the cheque might get incorrectly processed. Let’s detail the steps below:
1. Add “A/C Payee” Between the Parallel Lines
The very first step to writing a cheque account payee is by placing the words “Account Payee” or “A/C Payee” on the printed parallel lines placed on the cheque’s top left side.
- Why: This makes the bank know that this cheque amount is only usable for crediting the specified payee’s account.
- How to write it correctly: Write legibly and avoid abbreviated words except for “A/C Payee.” Do not tamper with or scribble the lines since that could lead to rejection.
2. Write the Payee’s Name
In the “Pay to” space write name of the person or party to whom you are giving money.
- Accuracy matters: You must spell the name precisely as it is recorded with the payee’s bank account. Otherwise, the cheque may be rejected in case of a spelling difference.
- Tips to avoid error: If you are not so sure about the spelling, take the precaution of asking them first. For businesses, make sure you use their formally registered name.
3. Double-Check the Amount
This step is filling out the cheque amount very cautiously in two places:
- In words: Write exactly the same amount clearly, starting from the extreme left side of the line. At the end add “only” to prevent misuse (Example: “One Thousand Only”).
- In numbers: Write exactly the same amount in the box, so that nothing is left for any scope of tampering. An example of this is “₹1,000.00”, which leaves nothing for any scope of change.
- Pro tip: The figures and words must correspond to each other. Small errors can make a cheque bounce.
4. Sign the Cheque Correctly
Your signature is the final and most critical step to making the cheque valid.
- Your bank records match: Sign must be the same you had registered with the bank. If your signatures do not match, then the cheque gets rejected.
- Where to sign: Sign in the left bottom right-hand corner on the cheque. Do not sign anywhere else in the cheque as it creates confusion.
- Extra care to be taken: Ensure that your signature does not overlap with any amount or payee’s name.
Tips on Drafting an Account Payee Cheque
- Use only Black or Blue Pen: Never use pencil or erasable ink as it cannot be relied on to be genuine.
- Do Not Overwrite: Any sort of overwriting may void the cheque. Start a fresh one in case of a mistake.
- Fill in Every Single Information: Do not leave out even a single portion to cut the chances of frauds.
This detailed process will ensure that your account payee cheque is accurate, secure, and processed without any problems. This helps reduce errors and provides peace of mind in financial transactions.
Conclusion
Whether you are writing a cheque for personal or business use, the difference between an account payee cheque and a crossed cheque will save you from many risks. Both aim to make secure payments, but an account payee cheque goes a step ahead to limit the transaction to the account of the payee who has been named.
The next time you are issuing a cheque, consider your needs and choose the one that best suits your case.
Common Questions About Cheques
Not exactly, A crossed cheque is an account payee cheque only when it is crossed with “Account Payee” or “A/C Payee” written between the lines.
No, you can only deposit account payee cheques in the payee’s account.
Crossed cheques are safer than open cheques but less secure than account payee cheques because they do not restrict deposits to a particular account.