How To Write A Cheque

Written by Bryan Daly
Fact-checked by Caitlin Wood

How To Write A Cheque

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Cheque Personal Finance

It’s always a good idea to have a few different tools that you can use to pay down your daily, monthly, and yearly expenses. Although it’s more common these days for consumers to use cash, debit, and credit to cover these costs, there are still many situations where a personal cheque can come in handy. 

For everything you need to know about how to write and use a cheque, keep reading.

What Is The Purpose Of A Cheque?

For those who have never used one, a cheque is a piece of paper that you can order through your bank or credit union. Typically, you’ll receive a booklet of identical cheques that have been printed with your personal information. While some chequebooks cost a small fee each time you order, they may also be a free perk if you have a certain type of premium bank account.

When you have your cheques in-hand, you can use them to pay for various costs. Once the person or organization you’re paying deposits the cheque, the money will be automatically withdrawn from your chequing account or savings account.  

Have you considered utilizing Google Pay to make purchases?

When Would You Use Your Chequebook?

Despite the fact that many businesses don’t accept personal cheques anymore, there are still some scenarios where they can be used, like when you:

• Borrow money from someone and wish to pay them back
• Pay your landlord for rent and/or utilities 
• Have to cover tuition fees, medical or dental bills, or other large expenses
• Purchase goods and/or services from certain small businesses
• Pay a contractor, plumber, or other home maintenance professional
• Haven’t created an online banking account

What Are The Benefits And Drawbacks Of Using a Cheque? 

Remember, while your cheque book can be useful in many situations, there are still other ways of paying for your expenses that can be faster or more convenient. 

Benefits

• You can ask the payee to hold off on depositing the cheque, rather than get the funds drained from your bank account immediately, as with debit or cash. 
• If you regularly balance your chequebook, having a physical record of your transactions can make it easier to calculate and budget for all your expenses.
• You can pay for some expenses without having to visit your bank to withdraw cash or log in online, which many people find confusing or inconvenient. 
• You can avoid adding more debt to your credit card and reduce the danger of it being lost, stolen, or frauded. The same principle applies to your cash and debit card, which can also be risky to lose or have stolen. 
• A cheque is only valid once you’ve signed it. Additionally, many cashiers and bankers will confirm your identity before they’ll validate it and your payee’s name will be on it. So, there’s less chance of someone cashing or depositing the cheque if you lose it. 
• Many businesses charge service fees when you make electronic transfers with cards or e-Transfers, which is not the case with most cheques.

Drawbacks

• Depositing and processing a cheque can take longer than with cash, debit, or credit. You might not know how much money is left in your account until the bank charges you a non-sufficient funds (NSF) penalty for another transaction. 
• Similarly, when you’re depositing or cashing cheques, it may take a few business days for your bank to inform you that the cheque has been denied because the payer is a fraudster or has insufficient funds in their account. 
• As mentioned, many banks will charge you to order new cheque books, unless you pay extra monthly fees for a premium account. Plus, you’ll have to visit, call, or go online with your bank to purchase them. 

• While some banks will accept a cheque online if you scan it or take a picture of it on your phone, others require payees to visit a branch to cash or deposit it
• Cheques aren’t as widely accepted as cash, credit, or debit. Plus, you’re typically not going to carry around your chequebook. If you don’t have access to any other payment options, some transactions may be impossible. 

What Features Appear On A Cheque?

Now that you know when you should use or avoid using a cheque, let’s talk about the features you’ll see on one. While there are a few kinds of cheque that you can write or accept in Canada, a standard personal cheque will normally contain the following features:

• Your name, address, and postal code
• A spot in the to fill in the date (DD/MM/YYYY)
• A line labelled “PAY TO THE ORDER OF” where you’ll write the recipient’s name 
• A line ending in “DOLLARS”, where you must spell out the payment amount
• A space to print the amount in numerals (ex: $100.00)
• The details of your banking institution (name, address, etc.)
• A line labelled “MEMO” wherein you can describe the cheque’s purpose (optional)
• Another line beside it where you can put your signature 

How Do Cheques Work?

The last feature that you’ll see on a standard cheque is four sets of numbers. These numerals are unique to each cheque and allow the recipient’s bank to locate your account so they can withdraw the desired funds electronically. 

• Cheque Number – The first section of numbers represents the sequence for which each cheque is printed in the booklet you order (ex: 001,002, etc).
• Transit Number – The next series helps classify the exact branch where the cheque book was requested (often it’s where you opened your account). 

• Institution Number – Also known as the “bank number”, this section showcases which bank or credit union the cheque came from.
• Account Number – As the name suggests, the last few digits in the sequence help identify the account that’s issuing the cheque.

What is a routing number? Learn more here.

Where Can Someone Record Their Payments And Transactions?

When you order your chequebook, your bank should also include a register so that you’ll have an easier time keeping track of: 

• How many cheques you’re writing 
• How much money you’re issuing 
• Who you’re paying the money toward 
• Why and when you’re making these transactions 

Overall, filling out your cheque register is optional and many consumers will simply use theirs to confirm that all the numbers in their bank account line up, which is commonly known as “balancing” their chequing account. 

However, listing all your transactions can definitely help you monitor where your money is going, as well as lessen the risk of theft, fraud, or accidentally spending more than you have in your bank account. If you wish, you can also use your register to keep track of any cheques that someone else gives you.

Who can freeze your bank account? Find out here. 

What If You Make A Mistake When Writing A Cheque? 

Unfortunately, if you print your recipient’s name wrong, enter the wrong payment amount, or forget to sign the bottom, then your cheque may be considered invalid, or worse, you could end up sending money somewhere you don’t want to. 

Don’t worry, because there are a few things you can do to bypass these problems and avoid any thieves taking advantage of a lost or stolen cheque:

• Cross out the mistake with ONE horizontal line, then rewrite the correct details
• Add your initials after the error to confirm that you approve it
• If the error is bad enough, write VOID in block lettering across the whole cheque
• If you’re still worried, destroy the cheque and dispose of it properly after voiding it

Before you attempt to correct what you might think is a simple error, consider that some mistakes may be considered worse than others. In fact, some banks will reject the cheque altogether if the payment amount is wrong or some information is illegible. If that happens, it’s probably safer to just void the cheque and start fresh. 

Note: Some employers, landlords, and other entities may ask for a blank cheque so they can verify your financial details. In that case, the VOID technique is also essential.

 Can I transfer money from my credit card to my bank account?

How Can I Keep My Money Safe When Using Cheques?

Still afraid of falling victim to a scam, theft, or identity fraud when issuing cheques? If so, there are several preventative measures you can take, including but not limited to:

• Write the cheque in pen (rather than pencil) to prevent anyone from erasing and rewriting the cheque. 
• Make a consistent signature that can’t be forged easily. This way, your bank can take the proper precautions if one of your cheques gets cashed and the handwriting doesn’t match up.   
• Leave as little blank space as possible when filling out the cheque. For instance, after printing the payment amount, simply draw a line through the rest of the space to stop anyone from adding numbers or words to it. Additionally, don’t let anyone fill out the information for you. 
• Avoid making any cheques payable to CASH. This is an option that allows the recipient to withdraw the money without depositing a cheque, which is much more dangerous in the event of loss or theft. 

What Are Some Alternatives To A Cheque?

If you’re still worried about writing or accepting personal cheques, it may be a better idea to avoid using them altogether. After all, there are plenty of easier and more convenient payment methods available in Canada, such as:

• Credit Cards
• Debit Cards
• Cash
• E-Transfers
• Automatic Payments & Transfers (through your bank)