Cheque Facts for Kids

A cheque (pronounced "check") is a special paper document. It tells a bank to pay a certain amount of money from one person's bank account to another person or company.

The person who writes the cheque is called the drawer. They have a bank account, often called a checking account, where their money is kept. The drawer fills in the amount of money, the date, and the name of the person or company who will get the money (called the payee). Then, they sign the cheque. This signature tells their bank, which is called the drawee, to pay the money to the payee.

Cheques are a way to pay for things without carrying lots of cash. They are like a written promise from your bank to pay someone.

It's important to write cheques to a specific person or business. If a cheque is lost and doesn't have a name on it, anyone who finds it could try to get the money. Also, a cheque that has a signature but no amount written is called a blank cheque. This can be risky because someone could fill in any amount.

Sometimes, a cheque might get lost or delayed. If there are problems, like if there isn't enough money in the drawer's account, the cheque might "bounce." This means the bank won't pay the money.

How Did Cheques Start?
What Are the Main Parts of a Cheque?
- Making Cheques More Secure
Why Are Cheques Used Less Now?
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How Did Cheques Start?

People have used forms of cheques for a very long time, even since the 800s! But cheques became really popular in the 1900s. They were a common way to pay for things without using cash.

In the second half of the 20th century, banks started using machines to process cheques. Billions of cheques were used every year. The most cheques were used around the early 1990s.

Since then, people have started using cheques less and less. New ways to pay, like electronic payments, have become more common. In many countries, cheques are hardly used at all now. Some countries have even stopped using them completely.

What Are the Main Parts of a Cheque?

A cheque has four main parts that help it work:

Drawer: This is the person who writes the cheque. They are paying the money.
Payee: This is the person or company who will get the money from the cheque.
Drawee: This is the bank that holds the drawer's money and pays the cheque.
Amount: This is the specific amount of money that needs to be paid.

As more people started using cheques, banks added more features to make them safer and easier to track.

Making Cheques More Secure

One important part is the drawer's signature. The signature on a cheque is the main way to check if it's real. Banks confirm the signature to prevent fraud.

Cheques also started to require the amount to be written in both words and numbers. This makes it harder to make mistakes. It also makes it much harder for someone to change the amount after the cheque has been written.

Issue dates were also added to cheques. A cheque might not be valid if too much time has passed since its issue date.

A cheque with a date in the past is called an antedated cheque.
A cheque with a date in the future is called a post-dated cheque. Usually, you can't get money from a post-dated cheque until its future date arrives.

Cheque numbers are also very common. Every cheque has a different number. This helps banks track payments and makes sure no one tries to get money twice from the same cheque.

Why Are Cheques Used Less Now?

The use of cheques has been going down for many years. For shopping in stores, people now prefer credit cards and debit cards. For paying bills, people often use telephone banking or online banking.

Cheques are made of paper, which means banks have to spend more money to process them compared to electronic payments. Because of this, banks in many countries try to encourage people not to use cheques. They might charge fees for cheques or make electronic payment options more appealing.

Cheques can also be more work for the person writing them and the person receiving them. You often have to hand over a cheque in person or send it through the mail.

Also, with automated teller machines (ATMs) everywhere, it's easy to get small amounts of cash. So, people don't always need to write a cheque for small payments anymore.