Paying by cheque

From: Financial Consumer Agency of Canada

When you write a cheque, you’re asking your financial institution to take that money from your bank account and transfer it to a person or merchant.

Personal cheques are a common way of paying rent or paying bills. Some businesses may still accept personal cheques.

There are things to consider when paying by cheque:

allow enough time for the cheque to reach the person or merchant you're paying by the due date if you mail it
always have enough money in your account to cover any cheques you write to avoid having to pay a fee
keep a record of payments made by cheque

Non-sufficient funds cheques

Your financial institution will usually charge you a non-sufficient funds (NSF) fee if there isn’t enough money in your account to cover the amount of a cheque you wrote. This is sometimes called “bouncing” a cheque.

If your cheque doesn’t go through, you may also have to pay interest and “chargeback” fees.

Make sure you know how much your financial institution will charge you if your cheque bounces.

Get electronic alerts from your financial institution

Your financial institution may send you an electronic alert when the balance of your chequing or savings account falls below a certain amount.

These alerts may help you manage your day-to-day finances and avoid fees.

Learn more about electronic alerts.

Stop payments

If a cheque is lost, stolen or has an error, you may want to request a stop payment to prevent the person or merchant from cashing it.

Not all financial institutions provide a “stop payment” service. You usually have to pay a fee for this service.

To request a stop payment, you must provide your financial institution with certain information, such as the:

cheque number
exact amount in dollars and cents
name of the person or merchant on the cheque
date that appears on the cheque

For a stop payment to work, your financial institution needs time to process it before the cheque is cashed.

In some cases, your financial institution may not successfully process your request before the cheque is cashed.

This may be because your financial institution receives incomplete or wrong information about:

the amount
the date on the cheque
the payee

If a stop payment doesn’t work, you’re still responsible for the amount of the cheque. To get the money back, contact the person or organization to whom you wrote the cheque and ask if they will give it back. Some institutions may reimburse you the fees charged for an unsuccessful stop payment.

Counter-signed cheques

A counter-signed cheque can be cashed by someone other than the person named on the front of the cheque if they sign on the back, or counter sign it.

To protect against someone doing this without your permission, write “for deposit only to account of payee” on the back of your cheque. This means only the person or merchant whose name is on the front of the cheque can deposit the cheque to his or her bank account.

Doing so may also help protect if the person or merchant signs the cheque over to a third party, such as a cheque cashing service. If the cheque doesn’t go through because of your stop payment, the third party may take steps against you to recover the money. This could include legal action.

Stale-dated cheques

If someone tells you they aren't able to cash your cheque because it’s stale-dated, ask for the original cheque back before writing a new one.

Financial institutions don’t have to cash a cheque if it's too old, or “stale-dated.”

Financial institutions usually consider a cheque stale-dated after six months, unless it's:

a certified cheque, or
a Government of Canada cheque

Keep track of whether cheques you write have been cashed or not. This will ensure that if a bank cashes a stale-dated cheque, you have the money to cover it. This could help you avoid NSF fees.

Post-dated cheques

A person or a merchant can’t cash a post-dated cheque before a certain date.

If your financial institution cashes a post-dated cheque early, try to resolve this with your branch. Ask your financial institution to put the money back into your account. You must make the request before the due date on the cheque.

If you can’t resolve the issue or if it results in NSF fees, you can file a complaint with your financial institution.

Dishonoured cheques

A dishonoured cheque is when the cheque doesn’t go through and can’t be paid.

Reasons for a dishonoured cheque may include:

non-sufficient funds (NSF) in your account
irregular signature, meaning your signature on the cheque differs from the sample signature in the financial institution
a difference between the amount written in words and the amount written in numbers

If your cheque is dishonoured, it will be returned to your financial institution.

Making a complaint about a cheque cashed on your account

If you have a complaint about a cheque that has been cashed on your account, contact your financial institution.

All federally regulated financial institutions must have a complaint-handling process in place to resolve disputes with consumers.

Learn how to file a complaint with your financial institution.

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