Cheque

A cheque is a written order directing a bank to pay a specified amount from the issuer’s account to a named recipient or bearer. It is a negotiable instrument whose payment depends on the issuer’s account and the bank’s processing.

Drawer: The person or organization that writes and signs a cheque, ordering payment from an account. The drawer issues the payment instruction and is responsible for having funds available.
Negotiable instrument: A transferable document that embodies a right to payment under specified legal rules. A cheque is a type of negotiable instrument, though transferability depends on its terms and applicable law.
Bill of exchange: A written order requiring one party to pay a specified sum to another party, often at a stated time. The cheque developed as a form of bill of exchange payable on demand and drawn on a bank.
Payroll cheque: A cheque issued by an employer to pay an employee’s wages or salary. It applies cheque payments to recurring compensation, especially where direct deposit is unavailable.
Direct debit: A payment arrangement allowing a payee to collect funds from a payer’s bank account under an authorization. A cheque is initiated by the payer, while a direct debit is collected by the payee.
Payee: The person or organization designated to receive a payment. A cheque names its payee unless it is payable to bearer.
Bank account: A financial account maintained by a bank to record deposits, withdrawals, and balances. The cheque orders payment from the drawer’s account.
Bank of England: The United Kingdom’s central bank, founded in 1694. Its early banking practices helped establish the use of written orders to withdraw money.
Cashier’s cheque: A cheque drawn by a bank on its own funds after receiving payment from a customer. It provides a bank-issued payment instrument for transactions requiring stronger payment assurance.
Wire transfer: An electronic transfer of funds between financial institutions or accounts. A wire transfer sends funds electronically rather than relying on a paper payment order.

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