Bearer’s Cheque: Here’s Your Guide To Withdrawal Limits

A bearer’s check allows the bank to withdraw money to the person depositing the document. These checks have the words “or bearer” printed on them and are only transferable by delivery, which means you need to take them to the bank. There is no other authorization from the issuer for payment. The payee’s name is not mentioned on the cheque, so the person who gives the check will get the money.

Bearer’s check is different from other cheques. Here’s all you need to know about them.

What is the maximum amount that can be withdrawn from bearer cheque?

There is no limit on withdrawal on bearer’s cheque. But banks have their own set of procedures and rules to ensure the safety of funds. If the amount mentioned in the check is more than Rs 50,000, the bank may ask for Know Your Customer (KYC process) if the transaction is of high value. The person may be asked to provide proof of his/her identity. The bank may also call the issuer to confirm the transaction.

Many lenders ask their customers to give notice in advance in case of withdrawal amount above Rs 50,000 so that they can easily arrange the matter for the check holder.

There is no service charge on issue or clearing of bearer cheques.

After depositing the bearer check at the bank branch, the branch takes a scan of the check and sends it to its head office. Once the transaction is confirmed by the main branch, the holder of the check gets the money.

Since bearer’s checks do not contain the payee’s name, there are a few precautions the issuer can take:

Write ‘only’ after mentioning the amount to be withdrawn in words (for example ten thousand only). After writing the amount in numbers, use the slash (/) and dash (-) symbols to indicate that no more money should be withdrawn.

You also have to take care of the spelling of the amount. If anything is wrongly written then the bank will dishonor your cheque.

Mention the date on your check and ensure that your signature on the document is legible.