Pd cheque what is

This date can be tomorrow, next week, or even years from now. If it's later than the current date, then it's a postdated check. People usually postdate checks when they want the recipient the person or business receiving the payment, also known as the payee to wait before depositing the check. Two potential reasons for this include:. Postdated checks are legal. It is also illegal to pretend to pay someone without actually intending to do so.

Just because it's legal to write a postdated check doesn't mean things will work out the way you intended. The date you choose to use is not part of a legally binding agreement between you and the payee. In most cases, the recipient can deposit the check at any time, and the bank is free to pay funds out of your account before the date shown on your check.

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. Banks have different policies for how long they will continue to monitor to prevent premature payment. In most cases, when you receive a postdated check, you can deposit or cash a postdated check at any time.

Debt collectors may be prohibited from processing a check before the date on the check, but most individuals are free to take postdated checks to the bank immediately. 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.

If the account does not have sufficient funds, the check might bounce , and you might have to pay insufficient funds or overdraft fees to your bank.

When you have a postdated check, find out if the check was intentionally postdated and figure out a solution. Cashing a postdated check might be more difficult than depositing it. Depositing allows your bank to place a hold on the funds while the check clears, but cashing a check requires an immediate transaction.

If you really want to cash a postdated check for the full amount, take it to the bank that issued the check where the check writer has a checking account. However, a rejected payment or an unexpected withdrawal from your checking account can cause numerous problems. If you properly provided instructions to your bank and they pay funds from your account anyway, your bank should be required to cover any overdraft charges that result. You may have further recourse against your bank for any other expenses you face.

If you have the option, it is best to avoid writing postdated checks. This could potentially incur you charges and cause inconvenience to the recipient. If you want to make a person-to-person payment on a particular future date it may be preferable to set up a standing order or one-off automated payment using online, mobile or phone banking services. Consumers and businesses are advised not to accept post-dated cheques because of the problems they create if they are paid into their bank accounts before the due date.

There are no specific rules on how banks deal with these post-dated cheques if they are paid in before the due date. If the bank does not spot that the cheque has been post-dated the cheque would be paid before you intended it to or even returned unpaid if you have insufficient funds in your account — potentially incurring charges for you.

The habit of post-dating cheques goes back to when the only means of payment was by cheque or cash; i. Historically, if someone wanted to phase their payments, such as for paying into an insurance policy, they issued a series of post-dated cheques to the recipient. Because this was an accepted payment method, the receiver of the cheque had a system in place for making sure that the cheques were not paid in before the intended date.

However, very few people have these post-dating systems in place now as there has been a move to automation, so any post-dated cheques they receive tend to all be paid in at the same time, running the risk of being returned unpaid.

Many banks state in their terms and conditions that post-dated cheques should not be written while some include a note at the front of chequebooks, advising that post-dated cheques should not be written.

So the safest practice is not to write post-dated cheques at all and set up a series of standing order payments, provided the recipient is set up to accept automated payments to their account. Or you can future date a series of online or mobile banking payments. The supplier agrees to hold the cheque and only present them on the given dates with the commitment from the business that both the cheques will be honoured and will be paid by the bank on the specific dates. Thus, on the date on which the supplier received the cheque, the supplier should not debit cash and credit account receivables.

The reason behind this is that post-dated cheques cannot be considered as cash before the date mentioned in the cheque and only on the date which is mentioned in the cheque leaf one can treat it as cash and deposit the same in bank. A post-dated cheque is a negotiable instrument Negotiable Instrument A negotiable instrument refers to the transferrable and signed written document whereby the payer guarantees or promises to pay a certain sum on a specific future date or as on-demand to the payee or bearer.

It includes bills of exchange, delivery order, promissory note, customer receipt, etc. These will again lead to the payment of insufficient fund fees or overdraft fees which will be collected by the bank as penalty from the cheque issuer or the payer.

Banks in US and UK will not the check the cheque date unless it has been typically mentioned by the issuer not to release the payment before the mentioned date whereas in India and Australia this is not the same and banks will not encash the cheque unless the date mentioned in the cheque has been fulfilled. You are free to use this image on your website, templates etc, Please provide us with an attribution link How to Provide Attribution?

Though no law makes post-dated cheques illegal. The payee can present the cheque at any point in time unless and until the payer mentions it to the bank that the cheque cannot be encashed before the specified date.

This is applicable for countries like US and UK where if required the payee can present the cheque at any point of time and is there is no instruction from the payer to the bank; the bank must honour the cheque which means the bank s free to pay the funds to the payee even before the date mentioned.

However, such scenarios are not present in India and Australia where banks are required to encash the cheque only on and after the specified date. When a future dated cheque is written, it guarantees nothing. One must provide written instruction to the bank, and the bank can tell us exactly how to do it. Different banks have different rules on how long they will continue to track to prevent premature payments which are again dependent based the user pays certain fees for this monitoring.