Cheques

What is a cheque?
A cheque is a paper instrument that orders a payment of money from a bank
account.
A current account holder can write cheques to order payments of money. Cheques
are provided when customers open a current account.
What happens when you deposit a cheque?
When you deposit a cheque you have received into your account, your bank will
send the image of the cheque to the payers bank to collect the amount on the
cheque for crediting into your account. This process of one bank collecting funds
from another bank is called cheque clearing and requires time.
Cheques are cleared Mondays to Fridays only. On Saturdays, Sundays and public
holidays, there is no crediting or debiting of customer accounts with cheques, GIRO
or interbank funds transfers.
The table below shows when the account would be credited or debited and when
funds would be made available for Singapore dollar cheques. For more details,
please call your bank.
Cheque deposited on

Account credited / debited

on

Funds available

Monday to Thursday (before

cut-off time*)

The same day the cheque

is deposited

The following day

(after 2pm)

Thursday (after cut-off time*)

Friday

Monday (after 2pm)

Friday (before cut-off time*)

Friday

Monday (after 2pm)

Friday (after cut-off time*)

Monday

Tuesday(after 2pm)

*For most banks, the cheque deposit cut-off time is 3.30 pm on Mondays to Fridays.
Cheques are accepted on Saturdays and Sundays at banks that offer branch
banking facilities on these two days or at Quick Cheque Deposit Boxes. However,
the cheques will not be cleared until Monday. On Saturdays, cash cheques can be
en-cashed at the payers bank. Cheques for deposit into an account may be marked

and drawn on, provided both the payee and the payer are from the same bank. A
handling fee will be charged for this.
Deposit cheques promptly to avoid the risk of loss and theft. Unless otherwise
stated, cheques are generally valid for six months from the date on the cheque.
What must you do when writing a cheque?
Ensure you
have sufficient
funds in your
account

If you have insufficient funds in your account, your cheque may

not be honoured (it may be rejected) when it is presented for
payment and you will incur these charges:
Handling / administrative fee for return of cheque, and
Overdraft (OD) interest charge to cover banks loss in overnight
interest.

Cross your
cheque where
appropriate

If you do not want your cheque to be encashed or if you want

your cheque to be non-transferable, you should:
Cross the cheque by drawing two parallel lines across the top
left-hand corner of the cheque;
Cancel or bearer on the cheque; and add Account Payee
Only (or A/C Payee Only) if the payment is meant only for
the person written on the cheque.
A crossed cheque is cleared through the bank account of the
payee.
If the cheque is crossed with only two parallel lines across the
top-left-hand corner of the cheque (general crossing) and
without cancelling or bearer, it can be deposited into any
partys bank account.
If you want the cheque encashed by the holder,
Do not cross your cheque;
Do not delete the words or bearer on the cheque;
Do not add the words Account Payee Only (or A/C Payee
Only).

Write payees

Write or print the name of the person or entity you are paying

name clearly

clearly and legibly. Cross out any extra space on the line after
the name, by drawing a line, to avoid unauthorised alterations
later. Use dark permanent ink, like ball point, and not ink that
can be washed or erased away.

Write amount
payable clearly

Write the amount in words and write only after the amount in
words. Cross out any extra space to avoid unauthorised
alterations later by drawing a line across the extra space.
In the box, put in the amount in figures. Cross out any extra
space with a line.
The amount in words and amount in figures should be the
same. If not, the cheque may be returned and charges may be
imposed.
The decimal point must be clearly seen. Do not use the
backslash symbol (/) in place of the decimal point as it can be
misread as the digit one (1). For clarity, use the comma when
dealing with large numbers with four or more digits, e.g.
$10,000.

Check all
details before
signing

Check all details before you sign a cheque. Never pre-sign

cheques. Avoid using signatures that are simple with few
strokes, as these are easily forged.
If you alter your cheque, do sign in full against the alteration. If
there is more than one alteration, it is better to issue a new
cheque to avoid confusion.

Avoid writing
post-dated
cheques

Post-dated cheques cannot be cleared immediately when the

payee receives them. There may also be processing charges
when the cheques are returned.

What if you want to stop payment?

If you want to stop payment on any cheque or the entire cheque book (in the event
of theft), notify your bank immediately. You can only stop payment of an issued
cheque if the cheque has not been cleared or encashed. An administrative fee may
be charged by the bank.
What if a cheque is returned unpaid?

If you are a Payee...

When a cheque that you have deposited into your account is returned unpaid, you
will receive an image return document (IRD) instead of the physical cheque. The IRD
serves as a notice of dishonour and replaces the original cheque for purpose of representment for clearing.
The bottom half of the IRD will set out why the cheque was unpaid as well as
whether you can present the IRD again for clearing.
If you can present the IRD to the bank for clearing, you should detach the IRD from
the Return Cheque Advice and deposit it at a branch of the same bank that you first
deposited the cheque. You may also use the bank's Quick Cheque Deposit box.
If you cannot present the IRD to the bank for clearing, you should return the IRD to
the payer and ask for a new cheque.
If you are a Payer...
If you have insufficient funds in your account, your cheque may not be honoured
when it is presented for payment and you will incur a handling or administrative fee
for the return of cheque, and also overdraft (OD) interest charges to cover the
banks loss in overnight interest.
The OD interest charge arises when a cheque is drawn on an account which has
insufficient funds. When a cheque is sent for clearing, the payers bank pays the
proceeds of the cheque to the payees bank and the account of the payer will be
debited on the same day. If the payers bank account has insufficient funds, the
bank will reverse the entry (i.e. credit back to the payer's account) on the next
business day. The payer's account will show an OD entry, and an overnight OD
interest charge will be imposed on the overdrawn balance in the payers account.
For example, if the payer issues a cheque for $1,200 when he has only $1,000 in his
account, he will be charged overnight OD interest on $200 when the cheque is
presented.
Note that the payers account will automatically go into an OD position due to
insufficient funds, regardless of whether he has a pre-arranged OD facility and
interest charges could apply.
How do you keep track of your transactions?
You can keep track of your cheques in the cheque register (counterfoil) provided in
your cheque book. This can help you keep track of the total amount you have paid
out in cheques. You can then check these transactions against your bank
statements as soon as you receive these.

If you spot any discrepancies, notify your bank immediately or within the time
period required by the bank