Writing a cheque can seem intimidating, especially if you’ve never done it. But it’s 2023, so why are people still writing cheques?! In Canada, there are still certain instances where writing a cheque is necessary.
Perhaps the most frequent one is paying rent. If your landlord asks you to write them a cheque for rent, you’ll need to know how! Writing a cheque might be daunting, but once you learn how it’s surprisingly simple.
In this article, I will walk through each step of creating and filling out a Canadian-style cheque so you have peace of mind when dealing with this payment method.
How to Fill Out a Cheque:
Filling out a cheque in Canada is a straightforward process. Follow these steps to ensure your cheque is filled out correctly:
- Date the Cheque: Write the current date in the top right-hand corner.
- Payee: Write the name of the person or company you are paying on the “Pay” line. If you don’t know the exact name, use an abbreviated version.
- Amount: Write out the total amount in words on the line below the “Pay” line. On the same line, enter the numerical value of the cheque in the box provided.
- Signature: Sign your name in the bottom right-hand corner of the cheque where indicated.
- Memo: In the bottom left-hand corner, write a brief message indicating what the cheque is for. This could be something like “Rent for May 2021” or “Utility Bill Payment.”
And that’s it! You’ve successfully filled out a cheque in Canada. Once you feel comfortable with the process, it should only take a few minutes.
How to write a business cheque in Canada?
Writing a business cheque in Canada is relatively straightforward. First, you will need to have a blank cheque from your financial institution, which should have the name of the company and its banking information printed on it.
- Begin by writing the date in the top right corner of the cheque. Make sure to use numerical format (for example, October 4th would be written as 04/ 10/2021).
- Write the name of the payee on the “Pay” line. This should be an individual or an organization (for example, a utility company).
- On the same line, enter the amount of money you are paying. Use words for amounts up to $999.99 and numerical form for over $1,000.00.
- Sign the cheque in the bottom right corner. Make sure to use the exact same signature as you have on file with your financial institution.
- Finally, enter a brief note in the memo line at the bottom left corner of the cheque indicating what it is for (for example, “June Rent”).
That’s it! You’ve successfully filled out a business cheque in Canada.
Reading a Canadian cheque:
Reading a Canadian cheque is pretty straightforward. On the top left-hand corner of the cheque, you will see the name of the financial institution that issued the cheque. Next, you will see the date the cheque was written for in the top right-hand corner. Below this is a line indicating who will receive payment (the payee). This should be an individual or a company.
Below these are two lines indicating how much money is being paid. The first line, which is in words, indicates the amount being paid in full (for example, “five hundred dollars”). The second line is a numerical value that shows how much money is being paid (for example, “$500.00”).
On the bottom right-hand corner of the cheque, there will be a signature line for the person writing the cheque. Lastly, in the bottom left-hand corner is a memo line that may include additional information about why the cheque was written (for example, “Rent for June”).
What are the numbers on the bottom of the cheque?
The numbers on the bottom of a Canadian cheque are called the “MICR” line. This stands for Magnetic Ink Character Recognition and is used by financial institutions to quickly and accurately process cheques. The MICR line consists of three parts:
- The Institution & Transit Number – This is a 5-digit number that identifies the financial institution where your account is held.
- The Account Number – This is a 7-digit number that identifies your specific chequing account.
- The Cheque Number – This is a 3-digit number that identifies the specific cheque being used.
Before submitting the cheque, ensure all the information is accurate and that you have written it in the correct format. It’s important to double-check your work to ensure there are no errors.
Bank Info: On the back of the cheque, list your bank information, including your account and transit numbers (your financial institution can provide this information). This ensures the cheque can only be deposited to the account number on the back.
How to Issue a Void Cheque:
Void cheques provide a banking institution, employer or otherwise with information about your bank account to set up direct deposit or automated payments. Therefore, knowing how to write and issue a void cheque is essential.
- Start by prominently writing the word “VOID” across the face of the cheque in all capital letters. This makes it so that the check cannot be used for any purpose other than providing banking information.
- Write your name on the “pay to” line as it appears on your bank account. This ensures that the check cannot be cashed by anyone other than you or an authorized signatory of your account.
That’s pretty much it; read our article about why and how to write a void cheque in Canada.
Also, check out:
The Best No-Fee Banking Accounts in Canada