CERTIFIED CHEQUE Meaning and
Definition
-
A certified cheque is a type of payment instrument that guarantees that the funds within the account of the issuer are enough to cover the specified amount, and are reserved for the intended recipient. To obtain a certified cheque, the issuer must have an account with a financial institution, usually a bank. The cheque is then written out by the issuer, transferring the amount specified on the cheque to the recipient.
Before certification, the funds are held by the issuer's bank, ensuring that the necessary amount exists in their account. Once the cheque is certified, the bank sets aside the funds needed to honor the payment, thereby confirming its validity and securing the recipient's confidence in the transaction.
The certification process involves the bank verifying the authenticity of the signature, the availability of funds, and freezing the specified amount until the cheque's maturity, usually a defined period of time. The bank then stamps the cheque as "certified," further assuring the recipient that the funds are reserved, and the amount will be paid on presentation.
Certified cheques are commonly used in situations that require a high level of trust and assurance, such as large purchases or real estate transactions, where physical cash is not feasible or safe. By providing a certified cheque, the issuer eliminates any doubts about the transaction's legitimacy and provides the recipient with a secure form of payment.
Common Misspellings for CERTIFIED CHEQUE
- xertified cheque
- vertified cheque
- fertified cheque
- dertified cheque
- cwrtified cheque
- csrtified cheque
- cdrtified cheque
- crrtified cheque
- c4rtified cheque
- c3rtified cheque
- ceetified cheque
- cedtified cheque
- ceftified cheque
- cettified cheque
- ce5tified cheque
- ce4tified cheque
- cerrified cheque
- cerfified cheque
- cergified cheque
Etymology of CERTIFIED CHEQUE
The word "certified" in the term "certified cheque" comes from the Latin word "certificare", meaning "to attest, assure, or confirm".
The word "cheque" has its origins in the Middle English word "cheke", which meant "a written order to pay money". This word derived from the Old French word "eschequier", which referred to the chessboard (as the pattern on a cheque was often like a chessboard).
Therefore, the term "certified cheque" emphasizes that the cheque has been confirmed or guaranteed by the bank, assuring the recipient that it is genuine and will not bounce due to insufficient funds.
Infographic
Add the infographic to your website:
