How to Write a Cheque
A cheque is a written order instructing your bank to pay someone else money from your account. It's essentially a more formal version of an IOU (I owe you), where you promise to pay the person or organization on the cheque a certain amount of money. On this page, we’ll take a look at how to write a cheque, what’s on a cheque, and how to order cheques in Canada.
What You Should Know
- A cheque requires a payee, amount, date, and signature to be valid.
- When writing a cheque always use black or blue ink, make sure there are sufficient funds in your account, and keep your cheques in a secure place.
- A cheque contains a cheque number, routing number, and account number to identify the bank from which the funds will be withdrawn.
The key items on a cheque are the payee, which is the name of the person that you are paying, the amount that you are paying, the amount written in words, the date, and your signature. There’s also a line to write a memo, and you’ll also find a cheque number, routing number, and bank account number on the cheque. Below, we’ll take a look at what each of these things means.
The payee is the person or entity that will receive the payment from your cheque. They can be an individual, business, or organization.
The amount section of a cheque is where you write the numerical value of the payment. In addition to writing the numerical amount, it's also important to write out the amount in words. That’s to avoid any manipulation of the numerical value.
The date section of a cheque is where you write the date that the cheque is being issued. In some cases, you may write a date in the future if you want to delay the cheque being cashed. That’s called a postdated cheque.
Your signature is a crucial part of the cheque, as it serves as your authorization for the bank to pay the specified amount.
The memo line on a cheque is an optional section where you can write a brief note about what the cheque is for. This section does not affect the payment in any way, but it can serve as a reminder or reference.
Each cheque has a unique number printed on it which is used for tracking and record-keeping purposes. At the bottom of the cheque, you’ll find your bank account’s information, such as routing number.
The top right corner of your cheque should have the current date written in numbers as either YYYYMMDD, MMDDYYYY, or DDMMYYYY. Many cheques use the international date format of YYYY/MM/DD. The date format will be shown to you on your cheque through field indicators printed below the date fields.
For example, if the current date is March 25, 2024, then you would fill in the date field as 2024/03/25.
The "pay to the order of" or "payee" line is where you write the name of the person or company that will receive the money. Make sure you spell their name correctly and use their official business name if it's a company.
For example, the official business name for WOWA.ca is Wowa Leads Inc.
On the right side of your cheque, you will find a box with a dollar sign in front. This is where you write the amount of money that you are paying.
Be sure to use numbers only, as no symbols or words should be used in this section. Include cents by writing it in decimal format with two decimals, such as $25.50 instead of $25.5. Write out the decimals even if there are no cent values, such as by writing $25.00 instead of just $25.
Below the payee line and to the left of the dollar sign box, you will find a long line with "Dollars" written at the end. This is where you write the amount in words.
Be sure to use capital letters and write the cents in fractional form. For example, $25.50 would be written as “Twenty-five dollars and 50/100”.
It’s good practice to cross out any empty space remaining in this field, to prevent others from adding extra numbers or words. This can be done by drawing a straight line.
Some cheques may have a "memo" or "for" line at the bottom of the cheque and to the left of the signature field. This is where you can write a note or description about the purpose of the payment.
The memo line is optional and can be left blank if not needed.
Examples of cheque memos might include “Rent for March 2024”, “Plumbing Repair”, or “Office Supplies”.
The bottom right corner of your cheque should have a designated space for your signature.
Make sure you sign the cheque exactly as it appears on your bank records to avoid any delays or issues when depositing the cheque.
You can now carefully tear off the cheque along the perforated line if it’s inside a chequebook.
It's always a good idea to keep a copy of the cheque for your records. This will come in handy if you need to refer back to it in the future for any reason.
Some cheque books have carbon copies that automatically make a copy for you on the sheet underneath. If not, photocopy the cheque or take a clear picture of it.
Things to Keep in Mind When Writing a Cheque
- Always use a pen with black or blue ink when writing a cheque. Black gel inks are recommended as they are harder to wash off.
- Make sure there are sufficient funds in your account before writing a cheque, or by the date on your cheque if you have postdated them.
- If you make a mistake, do not cross it out or use correction fluid. Instead, void the cheque and start over on a new one.
- Remember to keep your cheques in a secure place to prevent fraud or theft.
Postdated Cheques
A postdated cheque is a cheque with a future date written on it, usually to be cashed or deposited at that future date. This can be used as a way of delaying payment until the funds are available in the payer's account.
For example, you might make a rent payment to your landlord by writing a postdated cheque for the date rent is due. You need to ensure that there are sufficient funds in your account by that date.
Sometimes, a postdated cheque might be cashed early by mistake. If this happens, you should contact your bank. They may be able to return the funds to your account until the date on the cheque, and may reverse any non-sufficient funds (NSF) fees if applicable.
Non-Sufficient Funds (NSF)
Non-sufficient funds (NSF) is when you don’t have enough money in your chequing account to cover the amount of a cheque you have written. When this happens, the bank will return the cheque unpaid and charge you an NSF fee. In Canada, NSF fees are typically around $45 to $50.
Your payee trying to cash a bounced cheque can also result in additional fees from the recipient. To avoid NSF fees, always make sure there are sufficient funds in your account before writing a cheque or set up overdraft protection with your bank.
Payee Names
A common question asked is, “Can a cheque be cashed by someone else?”. The answer is yes, but only if it is properly endorsed. This means that the original payee must sign the back of the cheque and write "pay to the order of" followed by the name of the person they are endorsing it to. This person can then cash the cheque.
However, before endorsing a cheque over to someone else, remember that the original payee will no longer be entitled to the funds. It's always best to check with your bank for their specific policies and procedures regarding endorsed cheques, as not all banks will accept them.
It’s also possible to write a cheque to yourself, such as if you want to transfer money between your own bank accounts. In this case, you would write your own name on the “pay to the order of” line and deposit it into the desired account. There are other quicker ways to transfer money between your own accounts, though, such as with Interac e-Transfers, by withdrawing and depositing cash at a branch, or by adding your account at the other financial institution as an external account and making an electronic funds transfer (EFT) between your accounts.
Void Cheques
A void cheque is a cheque that has been marked or stamped as "void" and cannot be used for payment. This is often done when setting up direct deposit, automatic withdrawals, or other electronic transactions. In such cases, you are using your cheque to provide your account information to another party.
To void a cheque, simply write the word "VOID" across the front of the cheque in large letters with a pen or marker. This will prevent anyone from using the cheque to withdraw money from your account.
Numbers on a Cheque
Each cheque contains a series of numbers along the bottom left of the cheque. These numbers include:
The cheque number: This is used for record-keeping purposes.
The routing number: This is an 8-digit number that identifies the bank where the funds will be withdrawn from. Routing numbers consist of a 5-digit transit/branch number, and a three-digit financial institution number, split by a dash.
The account number: This is a unique number assigned to each bank account and is used to identify which account the funds will be withdrawn from.
If you are running low on cheques or need to order more, you can usually order cheques directly from your bank or through a third-party cheque printing company.
To order from your bank, you may need to visit a branch in person or call customer service. They will likely charge a fee for the order, and it may take a few weeks for the cheques to arrive.
Alternatively, you can order cheques from a third-party company online. These companies often offer a wider variety of designs and may be cheaper than ordering through your bank. However, make sure to do your research and choose a reputable company before providing any personal or financial information.
When ordering chequebooks online, you’ll need to provide your name, address, bank account number, routing number, and possibly the starting cheque number if you are continuing a previous order.
For example, a major bank might charge $50 for 100 cheques. You might be able to purchase 100 cheques from a third-party online for around $30.
Some banks offer free cheques, such as Simplii Financial. Others, like Tangerine, may offer the first cheque book free. Premium bank accounts at Canada’s major banks may also include a set number of free cheques each year.
To cash or deposit a cheque, you will need to have an account at a bank or credit union. If you do not have an account, you can often go to the issuing bank to cash the cheque for a fee.
If you have a bank account, you can either deposit the cheque at an ATM, through your bank's mobile app, or by visiting a branch.
Keep in mind that there may be holds placed on deposited cheques to ensure that the funds are available before being withdrawn. This can range from 1-7 business days or longer, depending on your bank's policies and your relationship with them.
If you don't have a bank account, or if you want instant access to the money, there are cheque cashing services available that are usually run by payday loan lenders. However, they often charge high fees.
A cheque is typically valid for six months from the date written on the cheque. After this time, the bank may refuse to process the cheque, and it would be considered “stale-dated”.
To sign a cheque, you will need to sign your name in the signature line. It should match what you have on file with your bank.
A post-dated cheque is a cheque that is dated for a future date. This tells the bank that the money should not be taken out of your account until the date written on the cheque.
If you make a mistake when writing a cheque, you should void the cheque and start over with a new cheque. You can do this by writing “VOID” across the front of the cheque.
Generally, yes. Cheques are typically linked to a chequing account and can only be written from that specific account. However, you can also write cheques using other products. For example, you can get cheques linked to your home equity line of credit (HELOC) to borrow money, or order balance transfer cheques from your credit card.
Disclaimer:
- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
- Financial institutions and brokerages may compensate us for connecting customers to them through payments for advertisements, clicks, and leads.
- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.