Like post-dated cheques, normal cheques also have only 3 months of validity from the date of issuance. Post-dated cheques are normal cheques with a future date written on them. The cheques cannot be honoured by the banks before the date mentioned on the cheque. A cheque is defined as an instruction to the bank asking to pay a stated sum from the owner’s account to the cheque presenter or drawer. Cheques are written or printed in a specific format and in a form that is not easily replicable. They may not have access to credit cards, forcing them to use the services of a local or regional payday loan company.

However, you know that next week, your employer will deposit your paycheck in your account for $1,500 (increasing your account balance to $1,800). For example, you may want to purchase something for $500 but you only have $300 in your bank account. This way, your friend will not be able to cash the check at the bank on any day that is prior to the date marked on the check. This article addresses the concept of cheques, Post-dated Cheques (PDC) and everything related to it. Let’s lay the foundation by understanding first what a simple bank cheque is.

A post-dated cheque is a regular cheque where the writer specifies a future date on the cheque. They do that to ensure the payment is made to the payee on or after the stipulated date. This date can be any future date, depending on the needs of the individual or the company. While postdating a check won’t guarantee a delay, you can specifically instruct your bank not to cash a certain check until a certain day.

The encashment of a post-dated cheque before the stated date varies from country to country. In several countries, post-dated cheques can be presented for payment any time, while in some countries these cheques are not honoured until the date stated on the cheque. A post-dated check (PDC) is, as the term implies, a check you issue in advance to your payee, but the date indicated is some date in the future. PDC’s are a convenient way of paying for your dues in advance without actually releasing the amount until the date indicated on the checks.

The other parties involved in the case of cheques are endorser – the one transferring his right for payment to another, and endorsee – the one to whom the right is conferred. In this article, you will get to know the difference between stale cheque and post-dated cheque. A check delivered now with a written date in the future, so that it cannot be cashed until that date.

Tips for Receiving a Postdated Check

An Indian post dated cheque is valid for three months from the day it was issued. Similarly, the rules governing the issuance and validity of post dated cheques vary from country to country. You’ll need to check the specific laws for your respective state, but postdated checks are generally legal to write in the United States.

Sometimes, the alternative doesn’t work, and you choose to issue post-dated cheque(s) assuming the funds will be available on the future date. To make the situation little more interesting, you may have received the post-dated cheques promising to honour the payment on a given date. You might have considered this as well in issuing a post-dated cheque. A cheque is a bill of exchange drawn on a specified banker and to be payable on demand. Giving a check without the date or the amount written on it is fine. However, please ensure that the cheque is made payable to the correct party and that the recipient’s name is written on it, i.e., the financial institution’s name.

Not a Guarantee for Check Writer

Imagine you decide to rent an apartment at a cost of $1,000 per month as of June 1st. As you can see in the image of a sample cheque above, several blanks need to be filled in before you send the cheque to be honoured by the bank. “It’s kind of a tricky scenario,” says Matt Foster, founder of the rental property search site iRent and a landlord in Ventura, California. All information is subject to specific conditions | © 2023 Navi Technologies Ltd. In the absence of a legitimate response from the responder, the interested party has 45 days to file a case.

In some cases, postdated checks get deposited, and nobody ever notices (they don’t look closely at the date). Unless there’s a problem or complaint, those checks are processed and forgotten about. Post-dated how to easily write a promissory note for a personal loan to family or friends cheque as the name implies is a cheque that carries a later date. The validity of the cheque remains for three months from the date of issuance, regardless of the number of days between the two dates.

How Postdating Works

You can return the check and get your money back up to the day before the check’s expiration date. Keep in mind that some banks have a policy where they can honor checks that are made out for a future date. For instance, your July 1st post dated check will only be cashable as of July st. This way, your landlord will only be able to cash your post dated rent check when your rent becomes due. Post-dating checks are effective ways to make regular payments to someone at fixed intervals. Yes, dishonour of post-dated cheques is considered a criminal offence in India.

Postdated Check: Is it Legal & How to Write One

The last alternative to providing a post dated check is the good old hard cash payment. Most people now have access to their bank account online where they can process payments. In many jurisdictions, a person intentionally writing a worthless post dated check with the intent to defraud the beneficiary can be criminally charged and convicted.

That said, if you agreed to wait, cashing the check prematurely might be considered in violation of an oral agreement, and that could be illegal in some jurisdictions. In banking parlance, the term “post-dated cheque” refers to a cheque written by the payer (drawer) for a future date. In simpler terms, a cheque is written with a future date beyond the date on which it was written.

Section 138 of the Negotiable Instruments Act holds legal standing in legal cases related to post-dated cheques. With the concept of cheques now behind us, it should be much easier to understand the concept of Post-dated Cheques. 2) the reverse, in which a person is promised goods or services but does not receive them and has to stop the cheque. (3) For the purpose of determining whether a post-dated instrument is a cheque, the fact that the instrument is post-dated shall be disregarded. Under Australian law a post-dated cheque is valid under the Cheques and Payment Orders Act 1986. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

To add further risk, payday loans can be rolled over for additional finance charges. It’s risky to rely on postdating or processing delays to ensure your check clears. Financial institutions now send digital pictures of checks to other financial institutions, so they can be cashed more quickly.

It’s not their fault, though, as digital payments are the most popular method of payment in this age of technology due to which cheques are used quite less for a deposit or withdrawal of money. In Serbia post-dating cheques is a customary practice in the retail industry. In banking, a post-dated cheque is a cheque written by the drawer (payer)[1] for a date in the future. A payday borrower typically writes the lender a postdated personal check for the amount of the loan plus a fee. The lender cashes the borrower’s check on the agreed-upon date, usually on the borrower’s next payday. However, postdating a check can lead to inconveniences and ill feelings for the payee, such as when a tenant sends a rent check and may or may not have the funds ready to be withdrawn.

Leave a Reply

Your email address will not be published. Required fields are marked *