It won’t be wrong to say that virtually everyone knows what a cheque is, except for millennials perhaps. 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. If you have an option to exercise, then it is best to avoid writing a postdated cheque. Even if your payee (the recipient) is honest, they may make the honest mistake of forgetting and leaving you with bad cheque fee. Issuing a post-dated cheque also involves a process of informing the bank with the written instructions which are cumbersome.
- Understanding the nuances of post-dated checks is essential for businesses and individuals alike.
- The Uniform Commercial Code (UCC) enables lenders to loan money, secured by a borrower’s personal property.
- In some cases, direct evidence may exist that proves that the defendant wrote the postdated check with the intent to cheat the recipient out of goods or services.
- In addition to criminal penalties, state laws authorize civil fines for writing bad checks.
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There are just 14 games remaining in the NFL regular season, and the playoff picture is almost set. Voted the “Most Trusted Real Estate Brokerage Firm” in the Philippines, we are a group of dedicated real estate professionals, committed to providing you only the best real estate services in the country. With the concept of cheques now behind us, it should be much easier to understand the concept of Post-dated Cheques. 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. Now we know the definition of cheque, let’s understand post-dated cheque. Your August 1st posted check will be cashable as of August 1st, and so on.
- Taxpayers living in Maine or Massachusetts have until April 17, 2024, due to the Patriot’s Day and Emancipation Day holidays.
- For example, if the cheque was issued or is payable on 01 Jan 2023, the cheque will be valid till 31st of Mar 2023, irrespective of the number of days in between.
- For example, if the cheque was issued or is payable on 01 Jan 2021, the cheque will be valid till 31st of Mar 2021, irrespective of the number of days in between.
- If the issuer takes no corrective actions, the concerned holder is free to file a case against the issuer.
- On the other hand, if you know or suspect that they’re postdating the check because they’re short on funds you might want to wait until the date on the check to cash it or deposit it.
For instance, someone with a car loan can schedule postdated payments to be transferred electronically from their account to the lender. If you are concerned about overdrafting — and you’d rather not deal with a returned check and your landlord’s ire — consider switching to a bank with a solid overdraft policies. All of these charge lower than average overdraft fees and offer free ways to avoid that fee while still paying your bills. 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. You can also give a standing instruction to the bank to make payment to any account at your desired date. Using these ways, you can avoid all kinds of extra fees and penalties that come with a post-dated cheque.
Legal implications of dishonouring a post dated cheque
Give a check just to the financial institution from whom you took a loan, and make sure to make it payable to that institution. Most people now have access to their bank account online where they can process payments. However, the only aspect that is different between a check written for today and a post dated check is that the beneficiary will not be able to cash it until the date indicated on the check. Every jurisdiction and country may treat post dated checks differently. In this case, you’ll write a post dated check for $500 by putting a date after the date you’re expecting to be paid.
A Class 6 felony carries also carries a minimum of a year and a maximum of 18 months in prison and a fine. A postdated check has the same effect as if it had not been issued until the day that it is dated and is not payable until lottery tax calculator that date. Postdated checks are functionally similar to promissory notes in that they are both promises to pay at some time in the future. Generally, the law does not prohibit the use of postdated checks, absent any fraud.
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Post-dating checks are effective ways to make regular payments to someone at fixed intervals. 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. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.
Alternatives to Postdated Checks
For this definition, a post-dated check is a check that has a future date put on it. A post-dated check is a check that is drawn on a date after the day the check was written, to put it simply. Now, you are in a situation where you have one or more post-dated cheques received as well as issued?
postdated check
Such cheques with a future deposit or encashment date are known as post-dated cheques. 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. Section 138 of the Negotiable Instruments Act applies to cheques and post-dated cheques alike.
So you date the check a few days in advance — also called postdating it — hoping your paycheck will clear by then. 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. 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. For example, assume that today is January 1, and you’re writing a check.
From the perspective of the check issuer, there should be no journal entry to record the reduction in cash until the date listed on the check. From the perspective of the recipient, there should be no entry to record the increase in cash until the date listed on the check. Thus, the date on the check effectively postpones the underlying accounting transaction. A post-dated cheque is valid for three months from the date of its issuance. You must confirm with your bank about the encashment policies of the post-dated cheque.