What Is Difference Between Bearer Cheque And Order Cheque?

A cheque is a document instructing a banker to pay the amount mentioned on the cheque to the payee, his order or a bearer.The markings and words on a cheque will determine whether the cheque is a bearer cheque, an order cheque or a non-transferable cheque. Most cheques are printed with the words :Pay ______ or Bearer the sum of ______.If you complete the cheque, fill in an amount and affix your signature to the cheque without any markings or words with a limiting effect, the cheque will automatically be a bearer cheque and any person in possession of the cheque can present the cheque for payment as bearer thereof. A Bearer cheque can be cashed by anybody.For a cheque to be a bearer cheque it must contain the words "or Bearer" on the document and it must not contain words which prohibit transfer for eg. "NotTransferable". Most cheques have the words "or Bearer "pre-printed. If the word "Bearer" does not appear on the document and the document does not contain words which prohibit transfer, the cheque is an order document. An order cheque can be cashed by the holder after it's been endorsed by the original payee.When paying by cheque it is advisable to cross the cheque then mark it as "nontransferable" and to delete the words " or bearer". This will have the effect that only the payee can cash the cheque and he can only cash it by paying it into his bank account.