What are the different types of cheques in the UAE?

Cheques are an important means of payment in the United Arab Emirates (UAE). They provide a secure and convenient way to transfer money from one person to another. When deciding to launch a business in the UAE, there are several factors that one should be aware of, including licensing, documentation, and company formation regulations. They should also be familiar with all of the requirements for opening and managing accounts, writing cheques, and making foreign transfers.

In this blog, we will discuss the different types of cheques in the UAE.

What is a Bank Cheque

A bank cheque is a legal document that enables the holder to withdraw funds from their account and a financial institution issues it in the United Arab Emirates. Issuing bank guarantees a bank cheque, which ensures that the money will be paid if the recipient’s bank refuses to honor the cheque. Large-scale transactions frequently involve bank cheques, which are a secure form of payment. The account holder must have enough money in their account and submit all required information, including the payee’s name and the amount, to issue a bank cheque. Cheque writers are used for a proper cheque draf these days, for accurate results and to escape cheque bounces

Different types of cheques in the UAE

Ordinary Cheque:

This is a standard cheque used for everyday transactions. It can be written for any amount and is payable to the bearer or a specific person. The payee can either cash the cheque over the counter or deposit it into their bank account.

Crossed Cheque: 

A crossed cheque is a cheque that has two parallel lines drawn across its face. This type of cheque can only be deposited into the payee’s bank account and cannot be cashed over the counter. This makes crossed cheques a secure way to transfer money, as one would not lose the cheque. The intended recipient can only use it.

Bearer Cheque: 

A bearer cheque is payable to the person who possesses it. It is not payable to a specific person or entity. This means that whoever holds the cheque can present it for payment, making it a highly negotiable form. However, because of the lack of security, bearer cheques are becoming less common in the UAE.

Order Cheque: 

An order cheque is payable to the named person or entity only, and you cannot transfer it to another person. This means that the named payee can only cash the cheque. It is a secure form of payment. Business Transactions and Payments to Suppliers generally use Order cheques.

Post-Dated Cheque: 

The Cheque writer writes this cheque with a future date, and one cannot cash it until that date. One can use the post-dated cheques as a form of payment for rent or other recurring payments.

Traveller’s Cheque: 

In order to make payments when traveling, a traveler’s check is a particular kind of cheque. One can cash it in any country and can use it as an alternative to cash. Traveller’s cheques provide added security as they can be replaced if lost or stolen.

Open cheque

Uncrossed cheque – As there are no crossed lines on an open cheque. Either of the banks—the bank of the payer or the bank of the payee—can cash an open cheque. Additionally, the payee can change the payee of an open cheque by transferring it to a new party. The open cheque’s issuer must affix their signature to both the front and back of the document.

Banker’s cheque

This kind of cheque is often known as a “manager’s cheque”. A bank emits this type of cheque and frequently uses it for real estate transactions. The bank itself issues banker’s cheques, which are typically only valid for three months. The Cheque writer writes these on behalf of the account holder to pay another party.

Elate cheque printing software helps with bank cheques in the UAE

Bank cheque writing is simplified by the Elate Cheque Writer. The software automates the printing of cheques and connects with several banking systems, improving the accuracy and efficiency of the procedure.

With Elate, you get a cheque writer that provides with the correct information. IInformation such as the payee’s name, amount, and date, is simple. Additionally, the software has security components including digital signatures and watermarks. Moreover, A cheque writer prohibits the printing of forged cheques.

Eliminating manual errors during the cheque printing process is one of the main benefits of choosing Elate Cheque Printing software. The software makes sure the printing of cheques is accurate, lowering the possibility of errors and saving time and money.

In conclusion, the different types of cheques in the UAE serve different purposes and provide varying levels of security. When choosing a type of cheque, it is important to consider the purpose of the payment and the level of security required. Whether you are making a personal payment or a business transaction, cheques are a convenient and secure way to transfer money in the UAE.

Elate also lets you control the printing of your cheques from a central site. This tracks your cheques, their status, and potential issues. This improves the organization and effectiveness of the cheque printing process, freeing up time and resources for other essential tasks.

Conclusion

In conclusion, the different types of cheques in the UAE serve different purposes and provide varying levels of security. When choosing a type of cheque, it is important to consider the purpose of the payment and the level of security required. Whether you are making a personal payment or a business transaction, cheques are a convenient and secure way to transfer money in the UAE.