How to Write a Cheque in Canada in 6 Steps
You may think that knowing how to write a cheque in today’s world of mobile banking and digital wallets is a lost skill. The truth is, though, you never know when you may find yourself in a situation where you’d have to resort to this old-fashioned payment method.
Read more on how to write a cheque in Canada, how to cash one and the answers to the most pressing cheque-related questions.
Writing a Cheque in Canada: 6 Steps to Follow
Here is how you fill out a cheque.
- Write the date: Put the date you signed the cheque in the box or line in the top right corner (or write a future date if you want to postdate the cheque). Make sure you write the correct year (a common mistake at the start of the new year).
- Write the name of the payee: This goes on the line next to Pay to the order of. If the recipient is an individual, write their full name. If you are writing the cheque to a company, use the company’s name or acronyms (if asked to). Make sure the spelling is correct and the name of the company or individual matches the legal name on their bank account.
- Write the amount (in numbers): Next to the dollar sign add the amount of money you plan to be withdrawn from your account. Separate the dollars from the cents with a period—for example, 1,822.72. If you are taking out less than a dollar, write the cents in decimals—fifty cents will be $0.50 and not 50¢.
- Write the amount in words: If you wish you may add the amount in words as well, under the name of the recipient, for clarity. This is not legally required, but it is a good idea since the amount written in words is more difficult to fudge. It’s also a good idea to draw a horizontal line before the dollars (in numbers) and between the dollars and the cents (in words) so that no one can increase the amount of the cheque by adding digits in the blank spaces.
- Add a memo: This is optional, but if you wish you can write the purpose of the payment—this can be a description, such as paying invoice, or you could enter the number of the invoice you are paying. Filling in this part is good for record-keeping and in the event of a legal dispute, can serve as evidence.
- Sign the cheque: The last step shows that the transaction is authorized, i.e. the cheque is valid and prevents anyone else from cashing it out on their own accord. Your signature should be clear, legible and match the signature on your bank account.
This is what a completed cheque should look like
(Source: Wikimedia)
If you turn the cheque over, you will notice a place for a signature on the back. This is known as the endorsement signature and is meant for the payee to sign, thus notifying the bank that they authorize the transaction.
What happens after you’ve filled out the cheque?
This depends on the chequebook you are using.
If you have a carbon-copy chequebook, tear off one copy for the recipient and keep the second one for yourself.
If you have a regular chequebook, you can fill it in the register at the front or the back of the chequebook. If your chequebook doesn’t come with a register, you can purchase one separately or keep a record of cheque payments in a spreadsheet.
How to cash a cheque in Canada
There are three ways to deposit a cheque in Canada
One is visiting the bank in person and giving the cheque to the teller.
Another is to cash in the cheque at an automatic banking machine (ABM). To deposit a cheque you’d need to
- Select the option to deposit a cheque
- Select the account you want to deposit to.
- Insert the cheque
- Confirm the details
- Select Deposit
The third option is to cash the cheque via your mobile phone. You can start by logging into your banking app and following the detailed instructions provided. Typically, you would need to take a photo of the cheque (front and back) and confirm your details. Then you should store the cheque until it is cleared.
Why Use a Cheque?
One of the biggest pros of cheques is that you can transfer an unlimited amount of money from one bank account to another for free. There is no interest paid as is the case with credit cards or restrictions of transfers—for instance, Interact e-transfers, one of the most common ways to send money in Canada, caps transactions up to $25k.
Transferring larger amounts enables you to use a cheque to pay for
- Electricity, heating and other utility bills
- Monthly rent
- A downpayment for a house or a new car
- Credit card and other kinds of debt
Note: If you are paying by cheque for a large amount, say a downpayment for a home, you will probably need a certified cheque rather than a personal one.
How to write a void cheque
A cheque that has been cancelled and can no longer be deposited is called a void cheque.
There are several reasons why you might want to void a cheque—you may have written the wrong amount on the cheque or you are no longer sending the payment.
To void a cheque, you must write VOID in clear large letters across the front of the cheque. Otherwise, someone could cash it in and take money out of your account.
If you have already sent a cheque in the mail and wish to void it, you would have to issue a stop payment with your bank. To do so, call the bank and provide details on the cheque in question, including the date, the name of the payee and the amount. The bank will probably charge a fee for the service, but they will deny the transaction if the payee chooses to cash in the cheque.
How to write a post-dated cheque
A post-dated cheque contains a future date on which the cheque should be cashed.
Post-dated cheques are typically written when you have an upcoming expense that your current bank account balance can’t cover.
Post-dated cheques are filled out as other ones—the difference is that you write a future date instead of the date you signed the cheque. When you give the cheque to the payee, tell them that it is post-dated so they will know not to cash it ahead of time. If they can read a cheque, though, they will probably know themselves, although it’s better to be safe than sorry.
However, keep in mind that a person can still cash a postdated cheque early. If this happens and you receive a non-sufficient funds fee from the bank as result, contact the financial institution directly. They will reimburse the funds to your account until the date the cheque is set to be cashed.
How Do I Keep Cheques Secure?
To avoid cheque scams, you should
- Never sign the cheque first: If anyone gets their hands on a blank cheque they would have unlimited access to your bank account.
- Always use a pen: If you write with a pencil anyone can change the amount and details.
- Keep a record of the cheques you’ve written, either as carbon copies or in the chequebook register.
- Don’t leave your chequebook lying around and shed and destroy old cheques that you no longer need.
- Check your balance regularly to ensure that no one has withdrawn money without your knowledge.
- Draw a horizontal line in any blank spaces between numbers to ensure that no one can add any digits there.
Bottom Line
Cheques are a convenient way to transfer money without paying e-transfer fees. They are also quite secure as only the payee can deposit them, thus limiting any possibilities of fraud and scams. Lastly, you can write a cheque for any amount you want so you always have access to cash without carrying a lot of it around—which is particularly useful if you are travelling.
On the other hand, processing payments takes much longer than cash or credit/debit cards. What’s more, with the rise of online banking, e-transfers and digital wallets, cheques are becoming obsolete and not a lot of people are using them.
Still, you should know how to write a cheque—you never know when you might find yourself in a pinch and need to fill one out to others or yourself.
FAQ
You may be able to cross out the error with a horizontal line, write the correct information over it and add your initials to indicate that you approve of the changes. However, even if you do correct the mistake, it is highly likely that your bank won’t accept the cheque and reject the transaction. Therefore, it might be best to void the cheque and start filling in a new one.
Writing a cheque out to cash is the same as filling out a cheque except instead of the name of the payee, you write Cash. Keep in mind that this is not advisable practice—when you make a cheque out to cash it can be cashed out by anyone whether you want them or not.
It is possible to write a cheque to yourself. This is usually done if you need to transfer funds from one account to another. To write a cheque to yourself, fill it out as you normally would, but write your name in the line for the payee. Then sign the field on the bank of the cheque to endorse it before you deposit it at the bank.
Cheques are valid for 6 months after the date written on the front of the cheque. After that time passes, cheques will not be accepted by the bank.
You sign a cheque at the bottom right corner underneath next to the line for the memo.
It depends on the amount the cheque is written out for. Usually, when one deposits a cheque for $100 or less, the bank pays out the funds instantly. Cheques for larger amounts, though, take about 4 to 8 business days to process since the bank has to run security and verification checks. This is known as a hold on a cheque. The first $100 will still be paid out instantly.
In numerals: Use a decimal between the dollars and the cents
In words: You can write the entire sum in words—for instance, two hundred and fifty dollars and ten cents or write the dollars in words and the cents in fractions—two hundred and fifty dollars and 20/100.
ABOUT AUTHOR
When Angela combined her deep-seated love for linguistics with her growing interest for finance and money management, she struck a gold mine. She’s scoured the internet far and wide for all things related to money and finances, including payments, budgeting and investing. Now she’s eager to share her knowledge and skills with the world, determined to make it a better place. In her free time, she loves to read a good book.
