What is the difference between order and bearer?

What is the difference between order and bearer?

An order paper specifies the name of the individual to which payment of the instrument can be made. A bearer instrument is the opposite of an order instrument, as no individual is designated. Anyone holding the bearer instrument can be paid.

What is a order cheque?

The order cheque is the one wherein the word bearer is canceled on the cheque. As the word bearer gets canceled the cheque automatically becomes an order cheque. An order cheque is paid to the payee across the bank’s account. The identification of the payee is insisted on by the bank while presenting an order cheque.

Can an order cheque be converted to a bearer cheque?

Since the resulting order cheque may be converted back to a bearer cheque by means of a blank indorsement, it is clear that the Act has no fundamental policy against the conversion of one form of cheque to the other.

What is bearer cheque?

A bearer cheque is the one in which the payment is made to the person bearing or carrying the cheque. These cheques are transferable by delivery, that is, if you are carrying the cheque to the bank, you can be issued the payment to.

What are the advantages of order cheque?

The advantages of order cheque are: a) Order cheques are safe because payment is made by the bank only. When the bank is satisfied about the identity of the payee. b) An order cheque cannot be transferred without the signature of the transferor. So, there is record of movement and it can be easily traced.

Can a order cheque be cashed?

Banks make payment of order cheque only on confirming the endorsement/s of Payee and other endorsees on the reverse of the cheque. Sometimes even the cheque may be issued ‘Pay Cash’. Banks have been making cash payment of such cheques to the person who presented it at the counter without any hassle.

Which is the safest form of crossing of Cheques?

Explanation: In Account payee crossing the amount will not be paid to anybody over the counter. It will be credited to the account of the payee only. Thus account payee crossing ensures safe transfer of funds.

When an order cheque is endorsed in blank?

A blank endorsement is a signature on a financial instrument such as a check. No payee is specified, so any holder of the instrument could claim payment. The signature essentially turns the instrument into a bearer security. That is, it is not registered to any individual but is payable to the person who possesses it.

What’s the difference between an open cheque and a bearer cheque?

A cheque is generally known as an Open cheque when it is not crossed whether it is made payable to bearer or order. Cheque in its printed form comes in the following manner: A bearer cheque is one that does not has the word ‘Bearer’ on the cheque cancelled.

When is a cheque called an order cheque?

When the word “or bearer” printed on the cheque is cancelled and and the word ‘order’ may be written on thecheque, the cheque is called an order cheque. An order cheque is one which is payable to a particular person. The payee can transfer an order cheque to someone else by signing his or her name on the back of it.

Can a bearer cheque be transferred to another person?

In case of a bearer cheque, no endorsement is required to encash it. In order words, the identity of the presenter of the cheque is not insisted by the banker. Stated differently, a bearer cheque can be freely transferred from one person to another person by merely delivery.

Can a bearer cheque be payable over the counter?

A bearer cheque can be used to be payable as Cash or bearer with a specific name. The bearer cheque does not have the word ‘bearer’ on the cheque. The cheque is payable over the counter to the bearer or the presenter of the cheque by the drawee bank. A bearer cheque can be transferred to another person.