What is Crossed Cheque? (Learn with Easy example)

A crossed cheque is a type of cheque that has two parallel lines drawn across the top left-hand corner, which indicates that it can only be deposited into a bank account and not cashed over the counter. The purpose of crossing a cheque is to make it more secure by ensuring that only the intended recipient can deposit it into their bank account.

There are two types of crossed cheques: general crossing and special crossing. A general crossing is when the cheque is crossed with two parallel lines, whereas a special crossing is when the cheque is crossed with two parallel lines and includes the name of a specific bank.

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Example of a General Crossing

Suppose you owe your friend Tom some money and decide to pay him back with a crossed cheque. You write a cheque for $100 and draw two parallel lines across the top left-hand corner. When Tom receives the cheque, he can only deposit it into his bank account and cannot cash it over the counter.

Example of a Special Crossing

Suppose you owe a business, ABC Corporation, some money and decide to pay them back with a special crossed cheque. You write a cheque for $100 and draw two parallel lines across the top left-hand corner with the name of ABC Corporation’s bank, XYZ Bank, in between the lines. When ABC Corporation receives the cheque, they can only deposit it into their bank account at XYZ Bank and cannot deposit it into any other bank account.

Crossed cheques are considered more secure than open cheques because they can only be deposited into a bank account and cannot be cashed over the counter. This reduces the risk of the cheque being lost or stolen and makes it more difficult for someone else to use it fraudulently. However, it is still important to be cautious when issuing crossed cheques and to only give them to someone you trust.

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